Priced Out in Paradise: Why Illawarra's Housing Crisis Is Among the Nation’s Worst

As the next federal election draws closer, it’s no surprise housing is one of the hottest topics on the table—especially for those living in the Illawarra and South Coast. A new report has confirmed what many locals already feel in their wallets: this region is one of the least affordable places in the country to buy or rent a home.

The report, from property analysts Cotality (formerly CoreLogic), paints a sobering picture. Two key electorates in the Illawarra—Cunningham and Gilmore—have ranked in the top 20 most unaffordable spots nationally to buy a home. Cunningham came in at 17th place, and Gilmore at 19th. It’s not just buying that’s tough—renters are feeling the pinch too, with both areas also ranking among the most unaffordable for renting.

Wages Can’t Keep Up

Cotality’s research director Tim Lawless said it’s no wonder housing is a major election issue this year. “We’re seeing a real mismatch between housing supply and demand. Combine that with the rising cost of living, high interest rates and low savings, and you’ve got a recipe for housing stress,” he said.

In Cunningham, which covers part of Wollongong and Wollondilly, and in Gilmore, which stretches across Kiama, Shoalhaven and part of the Eurobodalla region, home values have soared. Cunningham’s property values have jumped nearly 40 per cent over the past five years, while Gilmore has seen a 44 per cent rise. Trouble is, local wages haven’t kept pace—only increasing by 19 per cent in Cunningham and 22 per cent in Gilmore.

That means the average home in Cunningham now costs more than a million dollars. Even though prices didn’t spike as sharply as other areas, they started from a higher base, and that’s left affordability in the dust.

“It’s no surprise,” Lawless added. “Cunningham has beaches, great amenities and strong transport links—it’s a highly desirable place to live.”

Renting Isn’t Much Easier

For those hoping to rent instead of buy, the news isn’t much better. Cunningham again ranks 15th least affordable in the country for renting, and Gilmore isn’t far behind at 20th.

Back in 2019, renters were forking out around a third of their income for housing. Fast forward to the end of 2024, and that figure has climbed to as much as 39 per cent in some parts. Rents in all three Illawarra electorates—Cunningham, Gilmore and Whitlam—have gone up by more than 30 per cent in just five years.

“While rent increases haven’t quite matched the leap in house prices, they’ve still surged past income growth,” Lawless said.

Even Whitlam, which includes Shellharbour, southern Wollongong and parts of Wingecarribee, isn’t far off. With a value-to-income ratio of 9.5, it ranks as the 23rd least affordable electorate in Australia.

A Widening Gap

Across Australia, the average household now needs eight times their annual income to buy the median home—a record high that was last matched in 2022 and again at the end of 2024.

For voters in the Illawarra, it’s clear that affordable housing is more than a political talking point—it’s a daily struggle. Whether buying or renting, the pressure is on, and locals will be watching closely to see which party offers real solutions to one of the region’s most pressing problems.