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Best areas to invest in Wollongong, Illawarra, and the South Coast in 2024

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OpenAgent articles are reviewed by real estate experts and professionals. Our reviewers confirm the content is thorough, accurate and reflective of current trends and best practice. Content is reviewed before publication and upon substantial updates. Learn more about our editorial policy and review board here.

Johanna is one of the co-CEOs of OpenAgent. She has over 8 years of experience in the real estate industry through her work at OpenAgent and holds a class 2 real estate license in NSW. Previously, Johanna worked at hipages.com.au, Australia's largest trade marketplace, where she built her experience understanding renovations and home improvements for 7+ years.

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Looking to invest in Wollongong, the Illawarra or South Coast? Or, if you own property, are you wondering if it's time to sell up?

This whole region has a lot going for it, from the small city feel of ‘The Gong’ to the picturesque beaches and charming coastal towns of the Illawarra. Head further south and the beaches get whiter sand, quieter and arguably even more stunning. It’s why sea-changers, retirees and remote workers flocked there during the pandemic. 

So how did the property market there perform in 2023, and what are the experts predicting for 2024 and beyond?

What did the Illawarra, South Coast, and Wollongong property market look like in 2023?

Wollongong real estate
A major regional centre, Wollongong's real estate market is made up of a diverse range of property types.

Regional markets really took off during the COVID era, when people were looking to get away from densely populated cities and suburbs. Things have calmed down somewhat since then.

CoreLogic data shows that while regional areas held their own in 2023, capital cities surged ahead, growing +9.3 per cent vs the +4.4 per cent posted by combined regional areas. That means the gap between city and country house prices narrowed a bit (median price in regional areas: $605,780 vs. $832,193 in cities). The silver lining is your dollar will go further if you head for regional centres.

It’s useful to look at each region more closely as performance can vary quite widely:

  • Real estate in Wollongong performed well in early-to-mid 2023, likely due to Sydney market spillover and reached a median property value of $1 million. Then, later in the year growth slowed for a modest gain of +2.5 per cent over the year. Contrast this with Bundaberg in Queensland which recorded the highest overall annual growth for a regional location, rising +10.8 percent over ‘23.
  • In the Illawarra, growth varied across suburbs, with Lake Illawarra recording the strongest growth (+13.4 percent), while Bulli also posted a respectable +6.7 per cent lift.
  • The South Coast, which is popular with retirees, but also younger working families saw strong growth in pockets. Areas that posted exceptional growth over COVID have stumbled, with suburbs like Gerringong (-11.9 percent, median: $1,335,700) and Gerroa (-27.1 per cent, median $2,587,500) down over the past 12 months. Affordability has been the main drag on sales volumes there.
  • Kiama Downs (median: $1,200,000) in the Illawarra was also one of the regional suburbs with the highest clearance rates nationwide (83 per cent) in ‘23.

The bottom line is that compared to Sydney, the Illawarra, South Coast, and Wollongong property markets still offer better value for money - but buyers have been far more cautious with interest rates and cost of living pressures to consider.

How can we expect Illawarra, South Coast, and Wollongong real estate to change in 2024?

Overall, analysts are forecasting ‘24 to be a year of gains, though at a much lower rate - with housing markets more fragmented as buyers seek out affordability. 

Corelogic’s monthly update for February ‘24 highlights that regional dwelling values are now rising at a faster pace compared to the capitals, advancing +1.2 per cent vs +1.0 per cent. Dial down to regional NSW and it has advanced +0.8 per cent in the three months to January 2024. 

Sales volumes are also positive, up +3.6 per cent over the past 12 months - the biggest rise for any regional market for that period. These are both encouraging indicators that could point to a positive year ahead. However, until interest rates decline, the number of active buyers may be limited by their borrowing capacity, as well as cost of living pressures.

Dr. Nicola Powell, Domain’s Chief of Research and Economics predicts NSW regional markets to grow at a modest pace, forecasting houses will advance +2 per cent to 5 per cent, with units slightly softer at +2 per cent to 3 percent. Their end-of-year report notes two interesting trends, based on data collected from regional buyers:

  • Top keyword searches for regional locations include ‘view’, ‘waterfront’, ‘beach’, ‘river’ and ‘creek’. 
  • Regional buyers have become more budget-conscious, and are prepared to forego a house for a duplex or dual occupancy property. 

Let’s now look at the apartment market in these areas.

What's the Illawarra, South Coast, and Wollongong apartment market like?

Apartments continue to offer a relatively affordable entry point for buyers in these regional markets. Realestate.com.au data 

  • The median for units in Wollongong is currently $702,500, though they have only advanced +0.4 per cent over the past 12 months to date. You can expect weekly rent of $502 with an annual rental yield of 4.1 per cent.
  • Apartments in Nowra have a median value of $500,000 and have grown an impressive +31.8 per cent over the past year. Units there rent for $360 per week with an annual rental yield of 4.6 per cent. 
  • Units in Shellharbour have a median of $780,000, though they have dropped -1.6 per cent over the past year. You can expect in the region of $570 per week rent, and an annual rental yield of 3.7 per cent.

Let’s now identify some growth hotspots in these areas for you to research further.

Best areas to invest in Wollongong, Illawarra and the South Coast in 2024

If you are looking for an investment unit or apartment in the best suburbs of Wollongong, Keiraville is close to the University of Wollongong, with a mix of student housing and detached houses. The median price for a unit is currently $792,500 and has grown +5.9 per cent over the past 12 months. According to realestate.com.au units rent for $460 per week with a rental yield of 3.4 per cent. 

Further south in the Illawarra, houses in the town of Kiama have dropped a sizable -12 per cent over the past year, which could present a timely buying opportunity. Houses there rent out for $700 per week with an annual rental yield of 2.6 per cent. 

If you want to buy into the South Coast, the town of Nowra has affordability going for it - especially if you are coming from Sydney or Melbourne. Units have recorded spectacular growth over the past year, advancing +31.6 per cent for a median value of $500,000. Units rent for $360 per week with a rental yield of 4.6 per cent.