Wollongong's looming oversupply of new units: Herron Todd White

Property investors have been warned of a looming oversupply of new units either in the pipeline or currently developed within the popular CBD region of Wollongong, according to Herron Todd White.

Herron Todd White's September Month in Review noted demand for units was previously driven by locals however the "Sydney spill over" from investors and self managed superannuation funds is putting pressure on the local market.

"The combined effect of a recent retreat by several of the main stream lenders to the SMSF market together with an increase in interest rates could put downward pressure on rental returns and potential stock over-supply," the report warned.

"Well located 2-bedroom CBD units are presently commanding prices in the high $500,000 to $620,000 mark, and 3-bedroom units in good locations fetch over $800,000 up to $1 million in some cases."