The Regional Australia Institute (RAI) has welcomed the Federal Government’s action to begin to address regional housing market issues, through the Regional First Home Buyer Guarantee (RFHBG).
The RAI’s 2021-22 housing research series, ‘Building the Good Life’ identified the widespread tightness in regional housing markets, the different types of regional housing markets and the key, place-based policy responses needed.
The research showed difficulties accessing finance were constraining home sales and home building in many parts of regional Australia, and recommended a regional home loan guarantee as one mechanism to address the challenges.
RAI CEO Liz Ritchie said today’s announcement was an extension of the Government’s existing Home Guarantee Scheme and supported eligible applicants to purchase a home in a regional area with a deposit of as little as five per cent.
The program is available to eligible Australians already working, contributing, and making a life in the regions.
“Housing availability is now the biggest challenge holding back the potential of regional Australia,” Ms Ritchie said.
“We commend Federal Housing Minister Julie Collins for the specific recognition of the complexities of the regional housing market.”
RAI’s research found residents in at least 20 percent of all regional Local Government Areas (LGAs) faced significant barriers to accessing housing finance.
“City home buyers may require a 10 or 20 percent deposit, whereas in more remote regional markets borrowers may need double that. This inequity has been a contributing factor to the underinvestment in new homes in our regions.
“Assistance through the RFHBG program can assist prospective regional first home buyers to avoid paying mortgage insurance – often a barrier to home affordability,” Ms Ritchie said.
The RFHBG begins this Saturday 1 October, when detailed information about the program’s eligibility will be available on the National Housing Finance & Investment Corporation’s website.
Addressing the housing challenge is a key part of the RAI’s Regionalisation Ambition 2032, a framework to rebalance the nation and forge a more prosperous, inclusive and balanced future for regional Australia.
To further address the regions’ housing challenges, the RAI has a goal to increase regional rental vacancies rate to above 3% by 2032. Regional rental vacancy rates are currently exceptionally low, in many places below 1%.
Ms Ritchie said adding to the difficulty was a shortfall in new home building.
“In the decade to 2020, the regions grew by an average of 76,500 people per annum. But over the same period, homes approved for construction dropped in five out of those 10 years.”
The RAI wants actions to see annual building keeps pace with regional population growth.
“We know up to one in five Australians are considering a move to the regions. Our regions need more people to fill the more than 87,000 jobs on offer.
“Ensuring there are adequate, available and affordable home options is at the centre of addressing regional Australia’s record labour shortage.
“The Regional First Home Buyer Guarantee is a positive first step. A future holistic regional housing solution requires all levels of government and industry to collaborate.
“We look forward to continuing to work with the Federal Government and others on what must be a range of diverse housing policy solutions.”
For media enquiries contact:
Alexandra Macaulay
Regional Australia Institute
0409 652 465
[email protected]