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Why are home prices in this coastal town rising faster than anywhere else in Australia?

Property prices in Kiama have risen more than anywhere else in Australia in the past year, according to CoreLogic. (ABC Illawarra: Justin Huntsdale )

When Sally Medcalf was evicted from her home in Kiama on the NSW south coast in January, she never thought her family would be plunged into homelessness.

However, unable to find a new home in the area, she was relieved when a friend offered to let the family camp in her backyard.

"It has been impossible," she says. 

"It is not difficult, it is impossible."

"The amount that they want in rent we cannot afford.

"We are a single-income family but my husband makes good money, yet we still can't afford the [up to] $1,000 [per week] that they're now wanting for houses."

The Medcalf family have been living in tents after they were evicted six weeks ago. ( ABC Illawarra: Justin Huntsdale)

Six weeks later Ms Medcalf says trying to balance her children's schooling and the hunt for a new home had pushed her family to breaking point.

Unprecedented price surge

An increase in migration from capital cities during the COVID-19 pandemic has fuelled demand for homes in regional towns such as Kiama.

According to CoreLogic the median price of a home in Kiama has risen by 41.6 per cent in the past year to more than $1.5 million.

It is the largest annual rise in value of any of the local government areas analysed.

Kiama has a long history as an agricultural hub but in recent years its tourism industry has emerged as the region's main employer.

Subsequently, the number of properties being used for short-term holiday accommodation has also increased.

Kiama Deputy Mayor Imogen Draisma said in this market it is not only young people who are unable to find a home. (ABC Illawarra: Justin Huntsdale)

"Why would someone [put a house up for rent] who has invested in a property and gets $600 or $750 a week, when you could make that maybe in a night at peak time in the summer?" Kiama Council's Deputy Mayor Imogen Draisma says.

"It is definitely an issue and I think we will see it continue to have an impact on the rental accommodation available."

The 22-year-old says the housing issue in Kiama is no longer only just pricing young people out of the market.

Former real estate agent Warren Steel says the days of Kiama being an affordable place to live are over. 

Affordable housing 'not going to happen'

Kiama councillor and former real estate agent Warren Steel says he has seen Kiama change a lot in the 40 years he has been a resident.

"I'm 82 and years ago there was the North Shore and you knew you would never live there, it was upmarket," Mr Steel says.

"Kiama is now upmarket and, I am biased, but it is the most desirable place for anybody to live."

Kiama sits in one of the federal seats of Gilmore, one of the key marginal seats of the upcoming election.

Housing advocates are calling for the deficit in funding for social and affordable housing to be a key election issue, but Mr Steel doubts the major political parties will comply.

"I can't see either the state or the federal government coming for that," he says.

Sally Medcalf says being homeless while searching for a house has pushed her family to its breaking point. (ABC Illawarra: Justin Huntsdale)

With the help of a local charity Sally Medcalf has been able to find her family a new home 20 kilometres out of Kiama.

"She believes no family should have the uncertainty of homelessness hanging over them and called for both major political parties to do more to address the housing crisis.

"They do not know where to go. They do not know what to do and they cannot get the support that they are trying to get."

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