Wondering whether the Illawarra market will keep paddling forward or wipe-out like a rogue set at the harbour entrance? Let’s unpack the signals—minus the jargon—so you can decide whether to buy, sell or hold in 2025- 2026.
The national swell that sets the tone
| Macro lever | Current pulse (July 2025) | Why it matters for Illawarra |
| Cash rate | RBA steady at 3.85% – four meetings on hold, with economists split on the first cut arriving in Q1 2026 | A longer pause has cooled Sydney’s FOMO, flattening buyer demand down the coast. |
| Population growth | Net overseas migration up 9 % YoY (Home Affairs June-25 release) | International students and skilled workers now look beyond capital-city rents. |
| National dwelling completions | -6 % YoY (ABS 8752.0, June-25) | A thinner pipeline keeps upward pressure on regional prices and rents. |
Take-away: Under-supply persists nationally. Great for landlords, tricky for first-home buyers.
Illawarra snapshot: Early-winter tightness
| Metric (Jun–Jul 2025) | Illawarra | Sydney | National |
| Vacancy rate (REINSW) | >1 % | 1.6 % | 1.3% |
| Median dwelling value (CoreLogic) | $1.051 m | $1.19 m | $825 k |
| Gross house yields¹ | ≈ 4.9 % | 3.1 % | 3.73% |
¹ Suburb spread is wide—Woonona ~4.4%, Shellharbour ~5.2%.
Bottom line: vacancies hugging record lows and yields almost two points above Sydney’s keep Illawarra firmly landlord-friendly, even with mortgage rates just over 6%.
Price growth: will the engine stall or just idle?
CoreLogic’s Home Value Index shows Wollongong values slipped –0.2% in Q2 ’25. Flat, not falling off a cliff. Three buffers argue against a slide:
| Supply bottleneck – approvals down roughly 6% so far in FY 2024-25 despite a one-off 3 % lift in May (ABS 8731.0).
| Lifestyle migration – hybrid work standard for 39% of Sydney professionals
| Infrastructure uplift – the $1.2 B Princes Hwy upgrade and Port Kembla’s hydrogen hub (3 000+ construction jobs) are locked in.
Our read: expect 2–4 % house-price growth over the coming 12 months—tempered, not tanking.
Suburb micro-forecast
| Suburb | Current median (houses) | 12-month outlook | Why |
| Port Kembla | $812 k | ▲ 3–5 % | Energy-hub jobs + beach lifestyle; vacancy 1.1 %. |
| Dapto | $755 k | ▲ 2–4 % | Commuter rail + new-estate supply. |
| Thirroul | $1.62 m | ↔ 0–2 % | Prestige tier likely to plateau. |
| Shellharbour City Centre (units) | $639 k | ▲ 4–6 % | Hospital expansion + sub-5 % yields. |
Investor corner: yield versus cost in a 6% mortgage world
| Average investor (P&I) variable: 6.81% p.a. (major-bank average, July 25).
| Holding costs (repairs, insurance, management): ~1% of property value.
To sit “cash-flow neutral” you’ll hunt:
| Houses ≥ 4.5–5% gross
| Units / dual-key ≥ 5.5–6% gross
For sellers: Reading the July buyer psyche
| Days-on-market hovering at 38 days (CoreLogic July 25).
| Staged homes + pro photography still lift click-throughs by 62%
Risks on the horizon
| Risk | Why | Hedge |
| Rate surprise | A shock RBA hike would squeeze borrowing power. | Fix part of the loan, keep offset buffer. |
| Construction blow-outs | Delays could mute infrastructure dividend. | Favour established suburbs with existing amenity. |
| Policy tweaks | Rent-cap debate resurfaces each election. | Conservative rent-rise assumptions. |
| Extreme weather | East-coast lows still a risk. | SES maps + landlord insurance. |
A gentle swell, not a tsunami
Illawarra isn’t set for runaway double-digit growth, nor is it facing a wipe-out. Expect steady prices, razor-thin vacancies and yields out-shining Sydney. For committed buyers and investors, that’s a wave worth paddling into—provided you crunch the numbers and pick your sets.
Need suburb-by-suburb nuance? Dimosons tracks every sale, lease and DA notice so you don’t have to. Book a strategy chat today and catch the next set before the crowd does.
Helpful links
Visit the links below for more info on leasing in NSW:
| Step-by-step guide
| Why choose Dimosons
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