Illawarra property news April 2026

April 2026 Illawarra Market update

While the trajectory of house prices continues up, latest figures from research firm Cotality show that house price growth nationally has slowed for the first time since January 2025.

Housing across all categories rose just 0.3 per cent in April, dragged down by a 0.6 per cent fall in the two largest markets of Sydney and Melbourne. The Illawarra market performed better, up 0.5%, with Sydneysiders still on the search for better value and coastal living.

Cotality head of research Gerard Burg said that the market is facing pressure on multiple fronts. “We’ve obviously seen the impact of multiple rate rises with the likelihood of another one next month, we’ve seen the impact of inflation hitting the budgets of households, and the general uncertainty related to energy prices across the country,” he said.

Cotality Executive Research Director Tim Lawless said that the Illawarra’s proximity to Sydney was a key factor in keeping Wollongong prices on the rise – but that rate rises were a dampening factor.

“I would not class Illawarra as affordable exactly, with a median price around the million-dollar mark. But compared to Sydney, it is,” Lawless said. “Since the rate hike, we’re definitely seeing growth slowing down. Prices are rising, but not as quickly.”

Lawless said the strength of the Illawarra market had to do with its affordability in comparison to Sydney, but warned that international pressures, cost of living and interest rates may put pressure over the coming months.

Mr Lawless said that the Illawarra market was becoming a little more balanced between buyers and sellers with buyers keen to pick up a bargain being able to do so.

Managing expectations around interest rates

For keen property market observers, all eyes are on interest rates as the Reserve Bank continues to monitor global events.

While interest rate rises have traditionally been used to take money out of the pockets of consumers to slow inflation, higher property prices are especially sensitive to any upward move in rates.

It is important that vendors manage their expectations around prices as interest rates put a cap on borrowing capacity and this can have the effect of dampening seller expectations when it comes to asking prices. The biggest driver of interest rates is inflation. The latest round of inflation figures came in at 4.6% over the year, driven by a 30 per cent spike in fuel prices. That headline rate was up from 3.7% in February.

For context, the RBA wants inflation between 2 to 3% over the long term. In light of this, economists are tipping further rises into the back half of the year and buyers and sellers will be keeping just as close eye on inflation and rates as the Reserve.

Tinkering with tax settings

The Federal Government’s May budget is expected to bring generous tax breaks for property investors into the spotlight in the coming weeks.

For the last two decades, investors have enjoyed outsized capital growth on property fuelled by generous tax concessions including negative gearing against costs and a 50% capital gains tax discount for properties held for more than a year. In more recent years, some economists are wondering about the impact of those settings on the important first homebuyer’s market.

Tim Bartlett, Principal of Bartlett and Co. Property says that the changes may have an impact on investors. “It is difficult to see how the market will adjust to any tinkering with the tax settings. It is yet to be seen exactly what those changes will be, how they will be applied and the timing of any changes” he says. “As always, it is important to get your accountant on your side.”

Keep your eyes peeled over the following days for those all important changes.