Suburb Spotlight: Wollongong on track for stable growth
Wollongong appears to be benefiting from Sydney’s property boom, and not surprisingly it came up in one of our reader requests.
According to the ABS, the seaside area has around 190,000 residents, making it New South Wales’s third largest city, behind Sydney and Newcastle.
While the Illawarra city was once a traditional industrial town, Wollongong’s economy has diversified in recent years, due in part to the decline of Australian manufacturing and the presence of the University of Wollongong.
After slowing down over the latter half of 2011 and 2012, the last year has seen the Wollongong property market regain some momentum. The median house price in Wollongong is currently $497,000, 8% up from the previous year, while the median unit price is $374,000, up 9.8% from the previous year.
Dr Andrew Wilson, senior economist at Australian Property Monitors (APM), notes that the Wollongong property market has remained strong in the face of changes to the local economy.
“Wollongong has seen pretty positive results. Growth’s been solid rather than spectacular, and the state and national governments have been very proactive ensuring that the market’s been shielded from the negative impacts of job shedding in the steel industry.”
“It’s shown itself to be quite resilient market, considering the issues to do with confidence.”
In part, he attributes Wollongong’s strong performance in the property market to Sydney’s big year.
“Sydney’s been the strongest capital city market in the last 12 months, and Wollongong has certainly caught some of that Sydney fever.”
“Regional markets [like Wollongong] have been experiencing around 7% price growth over 2013 - about half of what Sydney’s been recorded at over the same period.”
Wollongong provides a welcome lifestyle change for Sydney residents, says Wilson.
“The lifestyle market of the south coast has general appeal, and growth in beachside areas shows the ‘seachange’ or ‘greenchange’ effect.”
McGrath Illawarra principle Jordan Andonovski has also observed the market picking up over the last six months, a trend he expects to continue in the long term.
“It’s been very good. Particularly, the last quarter of 2013 has been very, very active.”
According to Andonovski, prices have been bolstered by increased competition among buyers seeking an alternative to the Sydney property market.
“Comparative to Sydney, properties here are larger and less expensive. People are seeking bigger homes with bigger gardens for their growing families, and they can’t get that in Sydney anymore.”
Indeed, families seem to be having a big impact on Wollongong’s property market.
“We’re seeing buyers upsizing from small units to mid-sized homes as their families grow,” he noted.
“There’s also lots of investment coming in with the university. Late in the year, there were a lot of parents purchasing apartments for their children. They might live there for a few years, and once they move out, their parents will either sell the properties on, or hold on to them for the rental yield.”
The university has also appeared to influence the rental market, with reports that the city’s vacancy rate rose in early 2013 due to the university’s launch of its student accommodation facilities. The city’s vacancy rate now sits at 2.4%.
Andonovski expects that as Sydney’s population continues to grow, so too will the influx of non-local buyers, resulting in long term growth for Wollongong’s property market.