New report's strategies for purchasing in blue-chip Illawarra locations

A new report has outlined strategies for potentially purchasing entry-level homes in a few blue-chip locations throughout the Illawarra.

Property valuation and advisory company Herron Todd White's latest report has a theme of "champagne locations on a beer budget", or attempting to buy lower-priced real estate in desirable locations.

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According to HTW region director Chris McKenna, access to, and views of, the Pacific Ocean are what really drives up residential property values in the Illawarra.

"Other attributes of some of our prestige locations are exclusivity and proximity to Sydney," he said.

"We've identified the northern beaches from Thirroul up to Stanwell Park, Cliff Road in Wollongong, and Gerroa as the Illawarra's best locations."

We've identified what absolute entry-level is in these areas, and what compromises may be required to buy there.

Mr McKenna said this area is attractive due to its commutable distance to Sydney, with the trip from Thirroul to Central Station taking approximately one hour and 15 minutes.

"It is also a very narrow corridor bordered by the Illawarra escarpment and the Pacific Ocean, which means that many properties enjoy striking views and the time it takes to reach a great beach is under five minutes for most residents," he said.

"This area is relatively broad however, and hidden away are some 'beer budget gems' that don't stretch the bank balance quite as far as the median.

"There is a sprinkling of unit blocks around Thirroul with one and two-bedroom units occasionally available for $800,000 to $900,000 and entry-level housing comes along at around $1.2 million for moderately sloping blocks and old unrenovated dwellings."

Andrew Hedley from One Agency Kane Downie at Thirroul said these pockets of more affordable properties did exist, although were a "rare gem".

He said examples were recent sales in Robinsville Crescent, Thirroul, another in Pass Avenue, Thirroul that was in need of plenty of work, and another in Asquith Street, Austinmer, all around the $1.2 million mark.

"In terms of the $800,000 to $900,000 price-point for units, for a while there that was pretty much not... $900,000 was the bottom, and you had to be $900,000 or $1 million-plus to get into Thirroul for a two-bed unit," Mr Hedley said.

"(Whereas) there's now two (separate) two-bedroom units available in the $700,000s in Thirroul."

Mr Hedley said such entry-level pockets existed in the area, but homes there were typically in need of extensive renovations, sat on "difficult" blocks or were located in less sought-after streets.

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Mr McKenna said Cliff Road is the prime residential strip fronting the Blue Mile, and encompasses some of the region's finest and most exclusive residential unit complexes.

At the end of 2022, Cliff Road recorded three residential units sales between $4 million and $5 million.

He said the biggest compromise to make on Cliff Road is a view.

"Some complexes have rear units that don't enjoy ocean views and when you match the lack of view with a small, older, renovated, one-bedroom unit, you get an entry price of around $750,000," Mr McKenna said.

Thomas Pelosi from Belle Property Illawarra said there were one-bedroom units at that price-point, "but if you're going to buy a two or three-bedder, then they're going to start at mid-$1 million at least".

"At the back of the block will be cheaper," he said.

"But it's a prime location. It might not have the aspect, it's often un-renovated, but you've still got the Cliff Road address, and when you walk out your front door you're in the same position."

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The already in-demand market in Gerroa experienced a major COVID-influenced boom.

According to CoreLogic, the median sales price in Gerroa more than doubled during the pandemic. The figure was $1,338,000 in December 2020, and $2,850,000 a year later.

The median sales price peaked at $3,500,000 in September 2022, before dipping to $2,875,000 in December.

"Being approximately two hours' drive from Sydney, it is an easy distance that makes it a popular weekend getaway spot," Mr McKenna said.

"Its elevated geography provides many of its properties with expansive views to the north or to the south of the famous Seven Mile Beach. This is the main reason behind the rise in sales of properties over $5 million since 2020, topped out in October 2021 with the sale of 138 Headland Drive for $7.1 million.

"How can you get into the Gerroa property market on a beer budget? What many people don't know is that tucked away on Bland Place, Riverleigh Avenue and Stafford Street are a small number of older circa 1970s low-rise unit complexes.

"Units in these blocks surely represent the absolute entry level, but the problem becomes getting your hands on one as they are extremely tightly held with only five unit sales occurring since the beginning of 2015."

Ryan Stalgis from First National Coast & Country, who regularly sells properties in Gerroa, said snagging one of these entry-level homes could be difficult as they "come up very rarely".

"I believe I've sold one apartment there (in that area) in the past three years or so," he said.

"They're very tightly-held, and there is only a small scattering of them.

"You're looking at probably seven or eight units (like that) in Bland Place, and there's about three buildings across Stafford Street, one in Burke Parade, and two in Stafford Street. Two of them are four apartments each, and there's another complex that's a little bigger.

"But there's probably only about 20 in all of Gerroa that fit that criteria. And in a suburb where you probably only get 12 to 15 sales a year, the chances of one of them coming up is small."

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