Best areas to invest in Wollongong, Illawarra, and the South Coast in 2025

Looking to invest in Wollongong, the Illawarra or NSW South Coast? Or, if you own property, are you wondering if it's time to sell up?

This whole region has a lot going for it, from the small city feel of ‘The Gong’ to the picturesque beaches and charming coastal towns of the Illawarra. Head further south and the beaches get whiter sand, quieter and arguably even more stunning. It’s why sea-changers, retirees and remote workers flocked there during the pandemic. 

So how did the property market there perform in 2024, and what are the experts predicting for 2025 and beyond?

How did the Wollongong, Illawarra, and South Coast property markets perform in 2024?

New South Wales’ regional property markets proved to be a more resilient investment than Sydney in 2024, with CoreLogic data showing regional NSW prices rose 3.2 per cent for the year, outperforming Sydney’s more modest 2.3 per cent growth. While Sydney property values began to slip in the latter half of the year, regional markets remained firmer, highlighting the growing appeal of lifestyle-driven locations beyond the metro area.

Wollongong continued to show its strength, outpacing both Sydney and the wider regional NSW market with 4.5 per cent annual growth, pushing the city’s median home value to $972,500. This means Wollongong property remains more expensive than every capital city in Australia outside of Sydney. Over the past five years, prices have climbed 52.8 per cent, driven by the city’s strong economic fundamentals, its easy connection to Sydney, and its appeal as a major university hub. The city’s growing desirability for both investors and owner-occupiers has kept prices buoyant even in a high-interest-rate environment.

Looking further down the NSW South Coast, Batemans Bay experienced a small decline of -1.5 per cent, while Nowra - Bomaderry saw modest growth of 1.4 per cent. In contrast, St Georges Basin - Sanctuary Point recorded a sharper drop of -3.9 per cent. The mixed performance across the South Coast highlights that investors need to look at individual suburbs and property types, as conditions vary significantly from one location to another.

Wollongong’s rental market also remained under pressure, with vacancy rates below 1 per cent and rents rising 7.4 per cent over the year. InvestorKit’s Junge Ma commented on the market’s ongoing challenges, noting that “Wollongong’s rental market pressure is high… further rental increases are expected in the short term as the vacancy rate remains low and high house prices push first-home buyers away.” 

However, a potential interest rate cut in 2025 could help improve affordability, shifting demand away from rentals and into home purchases. Rental yields remain low at an average of 3.3 per cent, below the regional NSW average (4.6 per cent) and even trailing most capital cities. With Wollongong’s rental prices increasing 58 per cent over the past decade, it’s clear that demand is strong, but low yields and high property prices make it a challenging market for investors to enter.

How can we expect Illawarra, the South Coast, and Wollongong real estate to change in 2025?

While regional NSW property markets are expected to continue their steady performance in 2025, predictions vary on how much growth investors can expect. Domain forecasts house prices in regional NSW to rise between 2 and 4 per cent, while unit prices are expected to increase between 1 and 3 per cent—a continuation of the slow and steady growth seen in 2024.

For Wollongong’s property market, BambooRoutes predicts gains of between 3 and 7 per cent in 2025, noting that this aligns with the city’s long-term price trends. Several factors could drive Wollongong property prices higher, including ongoing population growth, which is keeping demand strong, and limited land availability, which constrains new supply. Additionally, infrastructure upgrades—such as improvements to the transport links between Wollongong and Sydney—are making the city even more attractive to commuters. 

Wollongong’s status as an educational and research hub also continues to bring in students and professionals, strengthening demand for both rental and owner-occupied properties. The rise of remote working is another key driver, as more buyers look beyond Sydney for a better lifestyle while maintaining city-based employment.

Propertyology takes a more conservative stance, forecasting modest growth of between 0 and 2 per cent for Wollongong and the Illawarra region in 2025. While acknowledging the area’s lifestyle appeal, Propertyology notes that housing demand is driven by more than just location, and Wollongong actually experienced a net population loss of 2,024 people from internal migration over the past five years. The city’s high median house price of $1,055,000 also makes it inaccessible for many buyers. 

Looking ahead, Wollongong’s most significant development project is ‘The Globe’, a $229 million, three-tower precinct featuring a five-star hotel and office spaces, which could bring long-term economic benefits to the area. However, overall market conditions are expected to remain relatively soft in the near term.

What's the Illawarra, South Coast, and Wollongong apartment market like?

Apartments continue to offer a relatively affordable entry point for buyers in these regional markets according to realestate.com.au data:

• The median price for units in Wollongong is currently $705,000, though they have dipped -0.3 per cent over the past 12 months to date. You can expect weekly rent of $550 which remained flat over 2024.
• Apartments in Nowra have a median value of $455,000 falling -9.0 per cent over the past year. Units there rent for $397 per week which has risen by more than +7 per cent annually. 
• Units in Shellharbour have a median of $890,000, gaining an impressive +13.4 per cent over 2024. You can expect in the region of $577 per week rent which has remained fairly steady.

Let’s now identify some growth hotspots in these areas for you to research further.

Best areas to invest in Wollongong, Illawarra and the South Coast in 2025

While the South Coast market may be delivering mixed results at present, there are a number of hotspots selected by industry experts that could be primed for strong capital growth and positive cashflow opportunities in the years ahead. Here are just a few:

Dapto, NSW 2530

With a median house price of $795,000 and annual growth of 8.2 per cent, Dapto is one of Wollongong’s fastest-growing suburbs, offering affordability and convenience. Located just 14km from Wollongong CBD, Dapto has expanded significantly with new housing estates designed for young families and professionals. Aus Property Professionals notes that the suburb offers a strong sense of community, access to cafes and shops, and excellent transport links, including a major train line and bus routes.

Kiama, NSW 2533

Kiama is one of the most desirable coastal suburbs in NSW, with house prices rising 8.9 per cent annually to a median of $1.5 million. A popular tourist destination just 20 minutes south of Wollongong, the suburb is famous for its blowhole, stunning beaches, and relaxed lifestyle appeal. Aus Property Professionals highlights Kiama’s blend of tourism and local charm, with a thriving dining scene, green parklands, and a growing population of around 15,000 people.

Batemans Bay, NSW 2536

Batemans Bay remains one of the most affordable coastal property markets in NSW, though its median house price declined -9.8 per cent over the past year to $667,500. REA’s Hot 100 Suburbs to Watch describes it as an idyllic coastal community with strong appeal for retirees, families, and investors. While once known as a retiree haven, Batemans Bay has seen increasing interest from younger buyers due to its affordability, lifestyle, and employment opportunities, particularly given its proximity to Canberra.

Warrawong, NSW 2502

Sitting 7km south of Wollongong along Lake Illawarra’s shores, Warrawong offers affordable coastal living, with median house prices up 9.0 per cent to $787,000. REA’s Hot 100 Suburbs highlights the suburb’s revitalisation, with government and private sector investment driving improvements in health and retail assets. The suburb’s proximity to the lake, beaches, and major shopping centres, along with growing interest from renovators, is pushing property values higher.

North Wollongong, NSW 2500

A prime lifestyle suburb, North Wollongong has seen unit prices grow 4.7 per cent annually, reaching a median of $700,000. BambooRoutes highlights the strong demand for luxury apartments, which has attracted both local and international buyers. With close proximity to Wollongong’s CBD, beaches, and the University of Wollongong, North Wollongong continues to be a high-demand market for both owner-occupiers and investors.

Shellharbour, NSW 2529

One of the strongest-performing South Coast suburbs, Shellharbour’s house prices surged 11.7 per cent to a median of $1.3 million, while units rose 13.4 per cent to $890,000. BambooRoutes attributes this growth to large-scale urban regeneration projects and improved public transport access, making Shellharbour even more desirable. With its coastal setting, vibrant retail precinct, and strong local economy, the suburb continues to attract both upgraders and investors.

Austinmer, NSW 2515

Despite a steep price drop of -20.7 per cent over the past year, Austinmer remains one of the most prestigious suburbs on the South Coast, with a median house price of $1.9 million. BambooRoutes notes that the area is benefiting from high demand for premium housing, with new luxury developments expected to push values higher again in the coming years. Located just 15km north of Wollongong, Austinmer offers beachside living, scenic landscapes, and strong appeal among affluent buyers.