Illawarra’s Housing Affordability Crisis: A Growing Challenge for Families
For many families in the Illawarra region, the dream of homeownership is becoming an increasingly distant reality. Joshua and Simona Parry, a couple with two young children under two years old, are a prime example of the struggles faced by aspiring buyers. They have been on the hunt for a larger home to accommodate their growing family for about a year, a process Joshua describes as “slow and painful.”
“At the back end of last year, there were a few homes we liked, and would go to auction, but it would blow out well over the guide,” Mr Parry, 36, explained. This experience highlights a common frustration: properties consistently selling for significantly more than their advertised price, placing them out of reach for many.
The couple, who currently reside with family in Albion Park while renting out their smaller apartment, are diligently saving for their next purchase. Mr Parry, an engineer, candidly admits that their situation, while challenging, is still better than many. “I’m positive that we’ll get something, but it won’t be without a bit of pain and sacrifice,” he stated. He acknowledges the significant hurdle of saving a deposit, which he believes is a “killer for a lot of people.”
Illawarra Ranked Among NSW’s Least Affordable Regions
New research from Airteam, conducted by Primara Research, paints a stark picture of the Illawarra’s housing market. The region has emerged as the sixth most unaffordable area in New South Wales, even surpassing Sydney’s North Shore and Inner West when comparing property prices against local incomes.
The analysis reveals a concerning trend: no areas within the Illawarra can be classified as affordable. A staggering 65 per cent of the region is now deemed “impossibly unaffordable,” while the remaining 35 per cent falls into the “severely unaffordable” category.
This represents a significant decline in affordability since 2019, when the Illawarra ranked 15th out of 28 analysed regions for unaffordability. In just a few years, it has climbed nine places, with the percentage of “impossibly unaffordable” areas surging from 21 per cent to 65 per cent – a 44 per cent increase.
Areas like Windang and Primbee now face the grim reality of properties costing 15.8 times the typical household income, presenting the worst affordability ratio in the region, despite median prices sitting at $1.09 million.
The Buyer’s Dilemma: Balancing Dreams and Budgets
The Parrys’ search for a home with a backyard for their children illustrates the difficult compromises many are forced to make. “We want a bit of a backyard for the kids, and the challenge is… There’s a lot of old places not in great condition, and finding the right sized piece of land and finding a house that doesn’t involve a huge amount of work, has been hard,” Mr Parry shared.
While newer duplexes are an option, the desire for a traditional backyard often clashes with affordability. “We could probably go buy a newer duplex that’s been developed, but we want a backyard for the kids,” he added. This desire for space and a family-friendly environment is becoming increasingly difficult to achieve within budget.
Peter Drennan, head of research and data at Primara, emphasised the crucial need for buyers to make informed decisions. “The challenge for buyers is making informed decisions that account for both property prices and local earning capacity,” he said. “Our data helps identify which areas still align budget with opportunity.”
External Factors and Local Impact
Neil Webster, from Stone Real Estate Illawarra and chairperson of the Real Estate Institute of NSW’s Illawarra chapter, points to the influx of out-of-area buyers as a significant factor driving up prices, particularly since the COVID-19 pandemic.
“Locals have unfortunately suffered as income levels have remained lower than in the capital cities, but our housing prices have increased disproportionately,” Mr Webster stated. He noted that the region is transitioning from a traditional blue-collar workforce to a more white-collar economy, with a growing presence in the health, IT, and finance sectors. He expressed hope that this shift will eventually lead to increased salaries and incomes.
Mr Webster believes that greater housing affordability will be achieved through increased density and the introduction of more homes to the market. “Dual-occupancy properties, duplexes and apartments on traditional larger blocks will unlock greater housing potential,” he suggested.
However, he also highlighted the persistent issue of insufficient housing stock in Wollongong. “The lack of stock in Wollongong in general – yes, we are building, but we are still behind compared to population increases – has created a supply and demand that will continue to see demand for homes in the region, until a parity in the ratio can be achieved.”
The Path Forward: A Complex Equation
The Illawarra’s housing affordability crisis is a multifaceted problem, driven by a confluence of factors including rising property prices, stagnant local incomes, and limited housing supply. For families like the Parrys, the dream of homeownership requires significant sacrifice and a willingness to navigate a challenging market. As the region continues to evolve, the hope remains that a balance between economic growth and housing accessibility can eventually be struck, ensuring that the Illawarra remains a place where families can not only live but also thrive.
