Suburb spotlight: Wollongong's resilience attracts interest
Cedar and lush grazing land attracted the early settlers to Wollongong in the early 1800s, but coal mining and the establishment of heavy industry 100 years later laid the framework for the city’s future.
Now – post job shedding as steel industry tariff cuts bit hard - the city of 292,000 has established a niche for itself as a broad-based industry, university and tourism town ready for a new chapter.
And Wollongong is holding its own in the property market despite fears that prices would tumble in a high-unemployment period.
Dr Andrew Wilson, of Australian Property Monitors, said the city – NSW’s third largest – had shown resilience despite the job-shedding issues in the steel industry in the nineties which were supposed to be significant. "It seems to have picked up Sydney’s energy with solid prices that appear to be rising," he said.
"Regional areas often tend to follow price cycles, reflecting the economic draw-downs flowing from big cities, and this seems to be happening at Wollongong, whereas there were expected to be problems."
Wilson said government compensation to soothe the effects of job losses had helped moderate fallout. "Wollongong is an emerging lifestyle market, too," he said, pointing to the cliff-side weekenders north of the city. "That’s part of the real estate market driver."
Covering 714 square kilometres on a narrow coastal strip bordered by the Royal National Park to the north, Lake Illawarra to the south, the Tasman Sea to the east and the Illawarra escarpment to the west, the name Wollongong originated from the Aboriginal word woolyungah meaning five islands.
According to the city’s public records, Aboriginals lived there for at least 30,000 years, with Wodi Wodi their tribal name. In 1815 a doctor, Charles Throsby, drove cattle down from the Southern Highlands to a lagoon of fresh water near South Beach, beginning permanent European settlement.
The area's first school was established in 1833 (Wollongong City Library), and a year later the Surveyor-General arrived from Sydney to lay out the township of Wollongong on Dr Throsby’s property.
The steel industry began in 1927 when Charles Hoskins entered into an agreement with the state government to build a steelworks at nearby Port Kembla. Operations began in 1930 with a blast furnace of 800 tons capacity. In 1936, BHP acquired Australian Iron and Steel Limited and production at Port Kembla increased rapidly. The steel industry was a catalyst for growth for many decades, and laid the foundations for the city's economy, lifestyle and culture.
But changing economics meant diversification became the key to the city’s future, with construction of the Sea Cliff bridge to the north adding focus to the tourism industry, and information technology, hospitality, health services and telecommunications becoming key industries in the region. The university has 22,000 students.
These far-sighted measures have laid the foundations for a resilient property market. Paul Abrahams, of Century21 Wollongong, said the city was having "record sales across the board" – especially in the sub-$400,000 price bracket.
"We’ve had properties selling within two weeks of opening," he said. “I’ve even sold one at the first open house."
Properties selling for under $300,000 are "walking out the door; those around $400,000 are taking a bit longer to move and those $700,000-$1 million are taking their time". Abrahams said buyers of this latter range can afford to be choosy: they know the costs of buying and selling – up to $100,000 - and might choose to put in a new kitchen or install a pool.
The large number at open-for-inspections – 12 people here; 14 there – puts pressure on potential buyers and pushes up prices. People are scared of missing out.
A common denominator is the high number of investors - perhaps three quarters of the total – and they’re mostly from Sydney. "They point to the minimal time taken to get here – about an hour and 15 minutes for the 82 kilometre trip – as well as the beautiful scenery and the beaches. And Sydney is very expensive."
Abrahams said the government had "got it wrong" giving incentives to investors rather than making it easier for first home buyers to get into the market. "The first home buyers are almost gone now," he said. "They used to get a $7000 grant and were exempt from paying stamp duty, which meant they needed less to buy a home and were at least in the race with investors who already had equity and who could arrange cheaper interest rates and lock them in."
He said giving grants to first home buyers of new property was "doing it the wrong way around".
"New homes take too long to build: you’ve got to clear the land and seal roads and they’re always a long way from infrastructure such as schools, roads and transport.
"The government shouldn’t worry about the more established buyers because they doing ok already: assisting them is going the wrong way about it because they don’t need handouts, whereas young people are battling with lower wages and job insecurity," said Abrahams.
staylor@propertyobserver.com.au