Wollongong has lost 1500 apartments from pipeline as housing shortage worsens

Managing director of Colliers Wollongong Simon Kersten said in the past 12 months we have lost more than 1500 apartments within the 2500 postcode from the five-year pipeline, which covered 2022-2026.

"Most of the ones lost are in 2025 and 2026," he said.

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"We've pushed out 500-plus each year out of those two numbers, back into 2027 and 2028, because those projects haven't started, and are behind."

Mr Kersten said the lost apartments could have potentially housed several thousand people.

Mr Kersten said there were a number of factors behind the slowdown in new builds, including the cost of materials, access to funding and delays in approvals.

The 'Wollongong Apartment Report' event on Thursday will investigate the latest on Wollongong's apartment supply, including what stock will hit the ground over the coming five years, and how many apartments are actually available right now.

Mr Kersten said 2023, 2024 and 2025 will deliver a combined 557 apartments in the Wollongong area; of those, 273 are available to buy today.

He said the likely date of completion for the WIN Grand apartments was 2028.

"If we put a thousand products into the market next year, the volume of the market is there, it will take it," he said. "We just don't have them to give.

"As for how we do it, Wollongong CBD is pretty tight - there's not a lot of sites left, the sites are quite expensive, and those that are around are constrained.

"Other than that, it's infill things that need to happen, and councils need to rezone land sensibly around existing transport. Why can't we have apartments at Fairy Meadow around the railway station, for example?"

His comments come as the 'Wollongong Apartment Report' is released, detailing the latest on Wollongong's apartment supply.

He also said he was not worried about negative press over some apartment builds in the city, and believed there was still a lot of confidence in apartments in Wollongong overall.

"If it was all doom and gloom, and we had a massive, industry-wide problem, we would see the decline in values of this product because nobody would want it," Mr Kersten said. "And we'd also see a decline in demand.

"Neither of those two things have happened."

"I think we have a robust system, and if you look at how many thousands of apartments are built in Australia every year, for the few problems, I think statistically we're doing pretty well."

Instead, Mr Kersten said the demand for apartments in the area wasn't being met, and there were two reasons why it wasn't over-supplied in terms of apartments.

"One of them is house prices versus apartment prices. Apartments have continued to sail upwards, and have seen no softening at all, whereas houses came back tightly.

"The other reason is our rental vacancy rates. The state average at the moment is incredibly tight at one per cent, and Wollongong is 0.4 per cent.

"And if you look at the growth in rental prices in the past 18 months, a two-bedroom apartment used to be $550 a week, two-and-a-half years ago. And it's now $700."

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