Illawarra housing values have now increased for nine months in a row, as the region's market recovery appears to be gaining momentum when compared to Sydney.
Illawarra values across all three categories - houses, units and overall dwellings (houses and units combined) - went up slightly last month, according to the CoreLogic Home Value Index.
The national HVI rose a further 0.9 per cent in October, accelerating from a 0.7 per cent rise in September. Since finding a trough in January, the national HVI has increased 7.6 per cent, leaving the index only half a per cent below the historic high recorded in April last year.
At the end of October, Illawarra house values were up by 0.6 per cent for the month. The region's median house value is currently $988,211.
Meanwhile, Illawarra units were up by 1.2 per cent over the month, with a current median value of $693,613.
Across all dwellings in the Illawarra, values were up by 0.7 per cent for the month. The median value currently sits at $916,133.
Eliza Owen, head of research Australia for CoreLogic said the Illawarra market has seen nine consecutive months of growth.
Ms Owen said in the three months to October, Illawarra values increased 2.5 per cent, up from a recent low in the quarterly growth trend at 1.6 per cent in the three months to August.
She said despite the spring selling season, the flow of new listings added to the market actually slowed a little through October (when 385 new listings were added to market) compared to August (443 new listings).
According to CoreLogic, regional markets continue to lag their capital city counterparts. At a broad level, the combined regional index was up 0.7 per cent in October compared with a 0.9 per cent rise across the combined capitals, and this trend of higher growth in the capitals was evident across every state.
"Despite the slower pace of growth, every rest of state region recorded a rise in home values over the month, except regional Tasmania where values were flat," CoreLogic's research director Tim Lawless said.
Ms Owen said the quarterly uplift in growth across the Sydney market was on par with the Illawarra dwelling market in the three months to October, with values rising by 2.5 per cent.
However, she said the Illawarra recovery started softer and is gaining momentum, while the Sydney upswing started stronger, and now appears to be losing a little momentum.
"This is in line with the lead-lag we might typically see in the major coastal cities compared with Sydney, noting the lead-lag is must tighter for markets like the Illawarra and Newcastle, because these are increasingly considered commutable extensions of greater Sydney.
"In the short-term, you would expect to see rising Sydney home values creating some spill-over of demand for the Illawarra region.
"If market conditions contract across Sydney amid high interest rates and affordability pressures, demand may eventually be drawn back to the Sydney metro, weakening performance across the Illawarra."
The Mercury also asked Ms Owen for any predictions for the Illawarra market across the remainder of the spring selling season and into summer.
She said like the trajectory for interest rates, calling the outlook for property markets feels pretty "finely balanced".
"On the downside of the outlook, there's the prospect for another rate rise next week, risks of heightened inflation for longer, and property values sitting relatively high," she said.
"Additionally, total listings volumes (in the Illawarra) are sitting at around 1300, which is slightly higher than the average stock levels observed over the past decade (1280).
"On the other hand, the Illawarra dwelling market is still seven per cent below the recent peak value in May 2022, which some may see as a good buying opportunity.
"With a median dwelling value of $916,000, it is still slightly lower than in the greater Sydney metro, where the median is $1.1 million, and is well below the median dwelling value of Sydney's higher-end lifestyle markets, such as the Northern Beaches, where the median value is $2.2 million."
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