‘CBD has a lot going on’: Report highlights ongoing demand for Wollongong apartments
A majority of apartments in the Wollongong CBD set to be complete in the next five years have already been sold, with the demand for apartment living on the rise. A new report reveals why.
Illawarra Star
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As cranes soar above the Wollongong skyline, so does the demand for apartments with four in five apartments in currently advertised developments already snapped up.
The data comes as part of Colliers Real Estate’s latest report into the city’s apartment stocks with managing director Simon Kersten forecasting the popularity of apartment living to continue for “some time to come”.
More than 3000 new apartments across 52 projects are set to be completed in Wollongong over the next five years, including 400 from the mammoth $400 million WIN Grand development in the heart of the city.
The report, which pulls in data from CoreLogic, also highlighted the widening gap between median apartment and house prices.
A decade ago, the gap was less than $100,000, but in mid-2022, that discrepancy has ballooned to nearly $400,000 with the median apartment price sitting at $712,000 - and the median house price at $1,105,000.
Despite the demand for apartments, the rate of new developments is sloping downwards with the number of apartment applications submitted to Wollongong Council each quarter decreasing by around a third - something Mr Kersten puts down to a logical decrease in greenfield land.
In 2010, Wollongong made up 3.5 per cent of the total development application approvals in NSW, however, that figure has been consistently falling with it sitting at 1.6 per cent at the end of June.
Colliers found there were a range of factors driving the demand for apartments in the city with Mr Kersten saying first-time apartment buyers were often at the “two ends of the spectrum”, namely young singles and couples and older empty-nesters looking to downsize.
Mr Kersten said one of the main aspects buyers were looking for was purchasing an apartment with the most bedrooms for their buck.
“There has been a lot of post Covid migration to Wollongong like a lot of other regional cities,” Mr Kersten told The Illawarra Star.
“People living in the city realise they could live further out. The Wollongong CBD has a lot going on, it’s a nice place to live these days and apartments are the logical choice.
“It’s become a two-speed market with the bigger ultra luxe $3 million apartments, but most of what we are seeing in the entry to mid-range is about affordability.
“People seem to want the most bedrooms for the price and most will want a small two-bedder than a large one bedroom apartment.
Mr Kersten is cognisant of troubled waters surrounding the economy with some financial experts tipping Australia is on the brink of recession, however, he believes there’s a buffer in Wollongong that should prevent it having too big of an impact on the apartment market.
“We don’t think it would change too much,” he said.
“It’s a positive that a lot of people have a job, employment is low and in Wollongong it’s very low.
“You have got to look at who the buyers are and what sectors they are working in. The no. 1 employer is healthcare and social services and education and training which are in demand so we are a little bit insulated from a recession.”
Apartment living should be embraced beyond the 2500 postcode according to Mr Kersten who sees potential for higher-density accommodation being built around the local government area’s key transport links and said these developments could play a role in assisting the affordable housing crisis.
“The current zoning in Wollongong Council only allows for high-density developments in certain areas,” Mr Kersten explained.
“It makes sense to put higher-density buildings where the services and amenities are.
“Planning maps show some areas around Fairy Meadow and Dapto, but personally I think Corrimal, Bellambi, Woonona and even Thirroul, though some wouldn’t like me saying that, around the railway stations should be marked for higher-density.
“Creating density around transport nodes takes away a reliance on cars and some areas around railways could also do with the revitalisation.
“We’re seeing a little bit of it (affordable housing). I believe that will come and will happen more often. Hopefully in more of the fringe developments, the ones not quite in the CBD, we will see more affordable apartments built into these.“
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