The coastal city of Wollongong might have suffered a setback this week after BlueScope Steel announced a 500-job loss at its Port Kembla plant, but the city’s “liveability” would keep its property market buoyant, experts said.
Real Estate Institute of NSW president Malcolm Gunning said there could be a rise in residential vacancy rates in Wollongong as some workers vacated rental properties and sought work elsewhere.
But he said investor demand and Wollongong’s status as a desirable location, plus its proximity to Greater Western Sydney, would underpin values. “Wollongong is seen as a good place to live and it’s more affordable than Sydney so it benefits from the overflow of buyers from that market,” he said.
MMJ Wollongong’s property agent Travis Machan puts his money on Wollongong because it is no longer “just a steel town. We are more than that. We are a university town too,” he said.
Mr Machan said BlueScope’s 500 jobs pales against University of Wollongong’s 3000-person workforce and the GPT Group’s shopping centre, Wollongong Central, provides another 1000 jobs. There is $1 billion infrastructure budget for hospitals and roads and a strong demand for housing from people in Sydney moving to the city to take advantage of its cheaper lifestyle, he said.
The median house price is just less than $580,000 and units are just more than $400,000 according to CoreLogic RP Data. “Wollongong is only an hour from Sydney. It takes some people longer to go home to their inner suburb homes,” Mr Machan said. “We see a ripple effect from Sydney and there is no softening yet. We are on a high.” Mr Machan who is marketing a 6000-square-metre residential site at 34-48 Flinders Street in North Wollongong with Knight Frank, approved for 160 units, said he has had strong interests from the Sydney and Asian market.
The “Gong”, as the town is affectionately known, has little A-grade office vacancy, with the ATO and ING Bank taking up long-term leases in the centre, Mr Machan said.
The impact of the BlueScope job losses would be mostly felt in the rental market, Mr Gunning said, as was the case in Newcastle, following the closure of the coal mines in the Hunter region. “There’s likely to be a bit of a blowout in the Wollongong vacancy rate when the jobs go. But you need to balance this up against the growth in jobs in south-west Sydney, where many Wollongong workers already commute to for work.”
http://www.afr.com/real-estate/bluescope-steel-jobs-might-go-but-the-gong-remains-strong-20150909-gji90m
From the Australian Financial Review – 10/09/2015
By Su-Lin Tan