Illawarra Property Market – July 2025 Update: Why Buyers Should Act Now

Joel Hynes
Jul 21
2 min read

Updated: Jul 22

The Illawarra property market is showing strong signs of growth and transformation as we move through the second half of 2025. With median dwelling prices reaching the \$1 million mark and buyer competition intensifying, now may be the ideal time for prospective homeowners and investors to make their move.

🔍 Key Market Highlights

Median Dwelling Price: \$1M, with a 1.6% quarterly growth [1]
Top Growth Suburbs:
- Kembla Grange: +10.8% FY growth
- Koonawarra: +7.7%
- Kieraville: +7.3% [1]
Rental Pressure: Blackbutt rents up 11.2%, with an average regional increase of 7% [1]
Auction Clearance Rate: 80.1% in Sydney, with Illawarra demand rising [1]
Listings Down: 24% drop since November 2024, tightening supply [1]

🚀 What's Driving the Market?

Several macro and local factors are contributing to the current momentum:

Interest Rates: The RBA has held rates steady at 3.85%, with speculation of cuts in late 2025 or early 2026 [2]
Infrastructure Projects: Major developments like the \$1.2B Princes Hwy upgrade and Port Kembla's hydrogen hub (creating over 3,000 jobs) are boosting long-term appeal [2]
Lifestyle Migration: A growing number of Sydney residents, especially from the west, are relocating to Illawarra for affordability and lifestyle [3]

📈 Expert Predictions

Real estate professionals across the region are forecasting continued growth:

Price Growth Forecast: 2–4% over the next 12 months, with potential spikes if interest rates drop [2]
Buyer Activity: Auctions now attract 4–5 bidders, up from 1–2 last year [1]
Suburbs to Watch:
- Port Kembla: Energy jobs + beach lifestyle
- Flinders & Blackbutt: Affordable, high-yield, close to amenities
- Shellharbour City Centre: Strong unit growth potential [2] [3]

💡 Why Buyers Should Act Now

Experts like Matt Knight from Precium and Amanda Bonnici from Ray White Shellharbour City agree that waiting for rate cuts could mean entering a more competitive and stressful market later this year. [3] With listings still low and demand rising, acting now could secure better value and less competition.

🏁 Final Thoughts

The Illawarra market isn't just surviving—it's evolving. Whether you're a first-time buyer, investor, or looking to upgrade, the current conditions offer a window of opportunity. With infrastructure, migration, and affordability all aligning, now is the time to explore your options.

Sources: