Illawarra home values continue to rise, with the region's market outperforming Sydney, according to Cotality's national Home Value Index.
However, one expert believes the Illawarra market was becoming "a little more balanced" between buyers and sellers, and the latter may encounter some obstacles in the months ahead.
In the Illawarra, values in all three categories - dwellings, houses and units - increased in March, ranging from 0.9 per cent to 1.1 per cent.
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The median dwelling value in the Illawarra is currently $1,071,290.
Cotality research director Tim Lawless said the Kiama-Shellharbour area has picked up in terms of growth, while the affordability of the Dapto-Port Kembla area was still shining through.
This follows the news that home owners in the Kiama LGA have on average pocketed a high six-figure gross profit from re-selling their properties.
Gerard Burg, Cotality's head of research recently said the Kiama market's strength really comes from the accumulation in value over the longer term.
Region is outperforming Sydney
Mr Lawless said the Illawarra's market was displaying resilience, with the 0.9 per cent monthly rise outperforming Sydney, "which is going backwards".
"We haven't really seen any demonstrated loss of momentum over the past couple of months," Mr Lawless said of the Illawarra market.
"It does seem to be a market that is quite resilient at the moment."
Mr Lawless acknowledged that the Illawarra wouldn't be immune to the likes of higher interest rates, cost of living pressures and the uncertainty surrounding global conflicts, as well as overall lower market confidence.
However, he said the Illawarra still retained an affordability advantage over Sydney, which likely accounted for its recent resilience.
"I'd be surprised if the market could withstand this level of growth; it likely will start to show some signs of slowing.
"Partly that's also coming into winter, which is a little softer.
"It really depends on whether or not we see sellers removing their homes from the market, as we are expecting selling conditions will probably become a little harder as the market eases off."
'A little more balanced'
Mr Lawless said the Illawarra market was becoming "a little more balanced" between buyers and sellers.
"It has been a market that's been favouring sellers, but I wouldn't be surprised if we start to see buyer demand easing," he said.
"We have seen some evidence that listing numbers have actually increased in markets like Sydney and Melbourne, but not as much in the Illawarra.
"But perhaps that's a sign that some vendors are trying to beat a further slowdown in the market, and sell while conditions are still quite good.
"I think we will see a pick-up in listing numbers, simply because of less demand and a slower rate of absorption.
"But if the market weakens more materially, a lot of vendors will likely choose not to test the market, and hold off for better conditions."
The national outlook
Cotality's national home value index rose 0.7 per cent in March, taking dwelling values 2.1 per cent higher over the first quarter of the year.
At the national level, the pace of gains is easing, reducing from a 2.8 per cent increase in quarter four last year.
The mid-sized capitals, as well as Darwin, are all recording growth of 1.2 per cent or more on a month-to-month basis, while Sydney and Melbourne navigate a subtle decline trend that has been evident since December last year.
"Since the end of November 2025, Melbourne values have retreated by 0.9 per cent and the Sydney market is down 0.4 per cent," Mr Lawless said.
"The softer trend in values coincides with falling auction clearance rates and a pickup in advertised supply, providing buyers with more choice and less urgency at the negotiation table."
Regional markets are showing some resilience to the slowdown, with values rising 1.1 per cent over the month and 3.3 per cent over the quarter, compared with 0.6 per cent month on month and 1.8 per cent quarter on quarter rises across the combined capital cities.
