Illawarra Property Market Update – Week Ending 21 December 2025

The Illawarra housing Market closed out 2025 on a surprisingly firm note. Despite the usual year-end lull, buyer demand has remained steady against a very scarce supply. Auction clearance rates have held at around 50% even as volumes decline, reflecting moderate yet resilient confidence. Median home values in Wollongong, Shellharbour, and Kiama have rebounded from mid-year lows to roughly $1.3 million for houses and about $715,000 for units – levels approaching their 2022 peaks.

In short, tight inventory and ongoing interest, particularly from Sydney buyers in lifestyle areas like Kiama and Shellharbour, have kept prices firm. Experts note that with interest rates on hold and affordability stretched, Illawarra remains an expensive Market. Growth has skewed to more affordable pockets where buyer demand remains strong. Overall sentiment is cautiously optimistic: stable rates, limited stock and eager buyers mean prices are expected to hold steady into 2026.

Key Stats (Wollongong / Shellharbour / Kiama)

• Auction Clearance Rate: ~50% (30–40 auctions held)

• Median House Price: ~$1,300,000

• Median Unit Price: ~$715,000

• Total Listings: ~1,300 properties (down ~14% YoY)

• New Listings: Very low as holidays approach

• Days on Market: ~28–35 days for houses (longer for units)

• Vendor Discounting: ~3–4% on average

Market Analysis

Supply remains the dominant theme in the Illawarra Market. Total stock levels are very low — around 1,300 homes for sale, roughly 14% fewer than the same period last year. This stock shortage is keeping competition elevated. Well-prepared buyers—pre-approved for financing, clear on property type and price limits—have often been able to secure well-presented homes quickly, sometimes before auction.

By contrast, overpriced properties are often passed in or withdrawn, only to be relisted in the new year. Approximately half of all auctions now end in post-auction negotiations—an opportunity for strategic buyers who know how to play the long game.

Median house prices have returned to ~$1.3M, and units to ~$715K. These values are within striking distance of their 2022 highs. However, growth hasn't been uniform across the region. Premium coastal pockets have mostly stabilised, while growth has been stronger in more affordable suburbs such as Dapto, Figtree and Port Kembla.

In fact, the Dapto–Port Kembla corridor saw annual growth nearing 9%, driven by value-seeking families and investors priced out of the city fringe. This aligns with broader Market trends — when regional medians rise above $1M, buyers often shift to more accessible, well-connected areas that still offer lifestyle appeal.

The seasonal slowdown is also now in full effect. New listings have tapered off, and most auctions have wrapped for the year. Buyer attendance at inspections has dropped slightly, but those still active in the Market are often well-qualified and ready to move quickly.

Holiday periods typically mean less competition — ideal for buyers who remain engaged.

Interest rates have held steady at 3.60%. Price gains in Illawarra have lagged behind those of some capital cities in recent months, mainly due to affordability constraints. Still, the Market has remained firm, underpinned by low stock levels, resilient demand, and the enduring appeal of coastal living within easy reach of Sydney.

What This Means for Buyers

• Be Prepared: With listings scarce, buyers who succeed act quickly. Pre-approval, clarity on priorities, and flexibility around timing are key.

• Watch Passed-In Properties: Approximately 50% of auction listings fail to sell under the hammer. This creates a window for negotiation, often with vendors willing to discuss pricing or settlement terms.

• Negotiate on Older Listings: Homes that have lingered through the spring may see price adjustments. If they remain unsold into January, vendors may be open to a deal.

• Consider Townhouses and Units: Units in the $650K–$750K range are more accessible and attract less competition. Given affordability constraints, this segment is becoming increasingly attractive to first-home buyers and downsizers.

• Target Affordable Growth Areas: Suburbs such as Dapto, Port Kembla, Figtree, and Keiraville are seeing solid demand and consistent value growth. They offer better entry points without compromising on lifestyle or infrastructure.

4–6 Week Outlook (Through Early 2026)

• Listings Will Stay Low: Expect very few new properties on the Market through Christmas and early January. Some homes will be temporarily withdrawn, further tightening supply.

• Auctions on Pause: Most auction campaigns are now finished for the year. Activity will resume in late January, with Saturdays post-Australia Day marking the first major auction weekends of 2026.

• Quiet Market, Then Rebound: Open-home traffic and buyer engagement typically dip through late December. However, serious buyers can benefit from reduced competition and negotiate more favourable terms. Activity generally picks up sharply in February.

• Prices to Hold Firm: No major price shifts are expected during this period. The low stock environment will support current values. Price-sensitive buyers may gain small wins, but large-scale softening is unlikely.

• Longer Days on Market (Temporarily): Properties listed now may take longer to sell due tothe seasonal slowdown. This trend should reverse in February when both buyers and listings return to the Market.

Conclusion: The final weeks of 2025 have shown that Wollongong's Market is both resilient and responsive. Listings are tight, buyer demand is selective but steady, and prices are holding — particularly in suburbs where value and lifestyle converge. For buyers ready to act strategically, the holiday period offers quiet windows for smart negotiations. Expect a faster-paced Market come February, so staying active now could put you ahead of the post-holiday rush.

Sources:

• The Shoreline Agency – Illawarra Market Wraps (7, 8 & 21 December 2025)

• Region Illawarra " Price barriers put the brakes onIllawarra'ss property momentum"”

• Bartlett & Co Property –" Dapto outperforms, grows 8.8% in 12 months"”

• CoreLogic Weekly Market Pulse – December 2025

• SQM Research – Weekly Property Listings & Vendor Discounts

• Domain – Auction Results by Region

• PropTrack Insights – December 2025 Regional Trends