Illawarra Property Market: Week Ending 15 June 2025 in Context

The Illawarra property market, which encompasses Wollongong and its surrounding suburbs, is experiencing a period of renewed growth in 2025, aligning with broader positive trends across regional New South Wales. According to the latest data, property values in the Illawarra are up 2.5% year-to-date, outperforming the national average and matching the strong performance seen in many regional markets. May 2025 marked the most substantial monthly growth so far this year for Illawarra, with prices rising 1% in just one month. This outperformance can be a significant factor for potential investors, indicating the potential for higher returns compared to the national average.

Demand, Supply, and Buyer Trends

• Homes in the region are selling quickly, with a median of just 36 days on the market, indicating robust demand and favourable selling conditions1.

• The region remains attractive to buyers seeking lifestyle benefits such as [specific benefits like proximity to beaches and national parks]and relative affordability compared to Sydney, with continued migration from metropolitan areas fueling demand23.

• Premium coastal suburbs like Coledale and Wombarra are especially popular, driving up the median house price in Wollongong to $1.26 million—a 6% increase from the previous year.

• The rental market is also tight, with rents up 7% across the region, creating opportunities for investors but exacerbating affordability challenges for tenants.

Market Drivers and Local Developments

• Experts attribute the market's resilience to a combination of limited supply, sustained demand, and the region's appeal as a lifestyle destination34. This limited supply is due to specific reasons, such as zoning regulations or a lack of available land, which contributes to the upward pressure on property prices.

• Infrastructure projects—such as the redevelopment of Warrawong Plaza and the proposed $300 million industry, education, and technology park—are expected to boost growth in suburbs like Primbee, Port Kembla, Warrawong, and Cringila.

• The expectation of further interest rate reductions in 2025 is likely to support continued price growth, with some predictions suggesting annual increases could reach as high as 9–10% if rates fall.

Short-Term Outlook

• The Illawarra market is expected to maintain moderate but steady growth through the remainder of 2025, supported by ongoing migration, infrastructure investment, and limited new housing supply (213).

• While the pace of growth may not match the extremes seen during the pandemic, the region is positioned to outperform national averages, especially as affordability pressures in Sydney continue to redirect buyers south21.

Summary Table: Illawarra vs. NSW Property Market (June 2025)

Indicator	Illawarra (2025)	NSW/Sydney (2025)
Year-to-date price growth	+2.5%	+0.6% (Sydney, annual)
Median days on market	36	Not specified
Median house price (Wgong)	$1.26 million	Higher in Sydney
Rental growth (annual)	+7%	High vacancy 1.7% (Syd)
Key drivers	Lifestyle, migration	Supply, demand, migration

In summary, the Illawarra property market is firmly in growth mode, with prices rising faster than the national average, supported by strong buyer interest driven by lifestyle appeal, affordability, and infrastructure investment. The region is benefiting from the broader NSW property trends but is also carving out its momentum, especially as more Sydneysiders look to relocate for value and quality of life (213).