Coledale's Investors Are Already Gone. The Rule Change Doesn't Start For Another Year. — Week Ending 19 July 2026

Illawarra Monday Market Pulse | Week Ending 19 July 2026

The upcoming changes to negative gearing won't take effect until July 2027. Until then, investors will only be able to negatively gear new builds. This gives us a year to prepare for the shift.

Interestingly, it seems that Coledale hasn't received this news. The market there is already acting as if the new rules are in place.

Pat Furci, the builder-developer behind two new duplexes on Cliff Street, shared with the Mercury last month that he is reconsidering his build mix.

Currently, he is focusing on premium properties priced at $2.6 million and high-$2 million ranges. These homes feature lift access and private alfresco areas, designed for downsizers rather than tenants.

However, Pat has indicated that he plans to adjust his strategy in the future. He aims to develop properties that investors can buy and hold, reflecting the direction of the new rules.

It's remarkable to see a builder adjusting his entire pipeline based on a policy that hasn’t even started yet. This isn't just caution; it's a proactive approach.

Market Overview

Looking beyond Coledale, the trends are evident across the region. According to Cotality's research director, advertised stock in the Illawarra is running 11.5% above the decade average for this time of year.

Moreover, Sydney's clearance rate has remained under 50% for six consecutive weeks, sitting at 47.4% as of last weekend. This is a significant drop from 69% during the same period last year. Investors are pulling back in anticipation of the CGT and negative gearing changes. This shift is creating real opportunities for owner-occupiers in a market that has been challenging for those without investor-level cash.

A Word of Caution

If I were in the market as a buyer, I would urge caution. The situation isn't a blanket green light. Premium coastal properties, like the duplexes in Coledale, operate under different rules compared to a three-bedroom brick veneer in Bulli or Woonona.

The real opportunity lies in the $700K to $1.3 million range across the corridor. This is where investor competition has genuinely thinned. Above the $2 million mark, buyers remain active. Coledale will continue to attract those who are not inclined to negotiate aggressively.

The Numbers

• NSW clearance rate: 47% (week ending 18 July) - below 50% for six weeks.

• Illawarra advertised stock: 11.5% above the decade average - more options, less urgency for buyers.

• Coledale duplex price guides: $2.6M and high-$2Ms - premium coastal properties still selling despite investor pullback.

  
  

The One Action

If you're looking to buy a home to live in—not to negatively gear—focus on the $700K–$1.3 million range across the corridor. Now is the time to push harder on days-on-market. Vendors who anticipated multiple offers six months ago are still adjusting their expectations. Meanwhile, investors who would typically compete with you are holding back until the July 2027 rules are finalized.

This gap will close quickly once the RBA begins cutting rates. Don’t wait until 11 August to see if that happens.

Conclusion

Navigating the Illawarra property market can feel overwhelming, but with the right insights, you can make informed decisions. Remember, the landscape is shifting, and opportunities are emerging. Stay informed, and don’t hesitate to reach out for guidance.

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