Illawarra rentals remain stable as sales activity slows: HTW residential

Illawarra rentals remain stable as sales activity slows: HTW residential
Illawarra rentals remain stable as sales activity slows: HTW residential

There is a declining residential market in Illawarra, according to the latest Herron Todd (HTW) residential report. 

The report notes that residential sales activity in Illawarra is below where it was during the peaking 2013 to 2017 years, but has not ground to a complete halt.

Transactions are still happening, especially where vendor pricing is realistic in the current market.

"Selling periods of three to six weeks are still common when the property is priced correctly, but there are many cases of long listings or multiple agents being used when vendor’s hold onto a belief their property can still command a peak price," the valuation firm said. 

Corelogic has reported that over the three months to April 2019, 75.6% of properties across the country sold for less than their original list price and this phenomenon of discounting is clearly evident in the Illawarra.

A property at 73 Armagh Parade, Thirroul (pictured below) has recently sold for $755,000 after initially being listed for $880,000 to $930,000.

It comprises three bedrooms, lounge, combined dining and kitchen, balcony and large double garage. 

Illawarra rentals remain stable as sales activity slows: HTW residential

Another property at 40 Brunderee Road, Flinders (pictured below) was sold for $679,000 after initially being listed for $829,000.

Set on a 472 square metre block, the single level home comes with four bedrooms, open plan living and dining space, alfresco area, central kitchen and double garage. 

Illawarra rentals remain stable as sales activity slows: HTW residential

"A big surprise for 2019 is that rents have remained relatively stable," the valuation firm said.

"With recent huge supply of new housing in growth corridors and units in the Wollongong CBD it was expected that rental demand and subsequently prices could drop.

"This doesn’t appear to be the case with property managers reporting decent demand for stock and overall rent prices holding."

A two bedroom unit located near the heart of Wollongong has been listed for lease with a price of $460 per week. 

Situated within a full security building, the unit at 54/313 Crown Street (pictured below) comes with two bedrooms, combined lounge and living room, large balcony and modern kitchen. 

Illawarra rentals remain stable as sales activity slows: HTW residential

According to the report, while this is not great news for tenants hoping for some rent relief, it is encouraging to investors.

A decline in selling prices means investors are able to get higher returns than were available at the peak period.

Gross yields as low as 4.25% were being experienced for investment properties at the back end of 2017.

A block of five two-bedroom units in West Wollongong sold for $1.1 million recently which shows a gross passing return to the investor of 6.15% with scope for increases in the future.

"With interest rates still low and rents stable these returns are slowly drawing some investors back to the market," the valuation firm said. 

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