Key regional housing indicators have alarm bells ringing in regions as house prices jump to record levels – with median prices now tipping $605k – almost on par with metro market figures three years ago.
Regional Australia Institute (RAI) CEO Liz Ritchie said as demand for a ‘life in the regions’ continues, attendees at today’s National Regional Housing Summit will join forces to develop bespoke solutions to support the region’s burgeoning communities.
“Regional housing must be a priority, as it is putting a handbrake on our nation’s growth and prosperity,” Ms Ritchie said.
“Our regions are gearing up to be the ‘engine room’ of the nation’s transition to net zero – however, housing will be the key barrier to this growth.”
Between March 2020 and December 2023, the median value of dwellings in capitals increased by 29.3% from $643,540 to $832,193, while in regional Australia it grew by 54.2%, increasing from $392,802 to $605,780.
“While it is still more affordable to buy in the regions, for now, there is no third option if locals or metro-movers are priced out of the market, and supply fails to meet demand,” Ms Ritchie said.
Analysis by the RAI has found flats or apartments make up just 2-3% of the total housing stock in some regional markets, compared to more than 42% in metropolitan Australia.
With population movement to the regions still elevated almost 12% on pre-COVID levels, housing supply requires laser focus, with demand for one and two-bedroom residential accommodation to support essential workers.
“We need to plan for, invest in, and facilitate regional growth because more people want to move to regional Australia, up to 3.5 million in fact,” Ms Ritchie said.
“But as a nation we’re not prepared for this changing shift in population. Thousands of jobs are on offer in our regional communities and to help fill those positions, we need more diverse housing options available. As regional Australia develops, so too must its housing stock.
“In the New South Wales city of Dubbo, construction is underway on a 15-story apartment block. This isn’t the sort of development you’d normally expect in an inland community, but it shows that demand for this type of housing is certainly there.”
Today’s solutions-focused Summit in Canberra, hosted by the RAI, the Real Estate Institute of Australia (REIA) and Master Builders Australia (MBA); supported by the Bendigo and Adelaide Bank, the Australian Forest Products Association, and the National Farmers Federation, brings together local, state and federal government, along with representatives from industry, peak bodies and the not-for-profit sector as part of a collective effort to shape the future of regional housing policy.
RAI, REIA and MBA will today release a Discussion Paper presenting the latest regional housing stock data and highlighting local solutions.
The Paper also makes policy recommendations including taking a targeted approach to how the Housing Australia Future Fund is invested in regional areas; a National Population Plan to ensure long-term planning for future infrastructure; and adaptable policy solutions that can be tailored to address specific issues in specific communities.
REIA CEO Anna Neelagama said in high-growth areas, it was imperative swift action was taken to alleviate current pressures on housing.
“We know the problem is a lack of supply. It’s now time to move forward to specific solutions and put delivering them in the hands of our regional communities. These communities need at scale injections of funds in areas of high growth to build more houses and better use any existing empty houses across our regions,” Ms Neelagama said.
MBA CEO Denita Wawn said to achieve sustainable growth in regional communities, all levels of government needed to work closely together on removing the biggest roadblocks - zoning, planning and integrated land use.
“As regional communities grow into bigger hubs of activity, the type of housing on offer needs to satisfy the needs of everyone in that community. It’s not always about building out but building up with appropriate infrastructure and services in place,” Ms Wawn said.
“However, the industry’s capacity needs to be bolstered in the regions to ensure supply can keep up with demand. Governments need to look at how we can ensure the regions are an attractive place for businesses to expand in to and workers to move to.”
Ms Ritchie said whilst housing was top-of-agenda for state and federal governments, more detail was needed about how current and proposed policies would be implemented in a regional context, where housing markets were hugely varied.
“In some communities, finding a block of land to build on is difficult; in others, there’s a surplus. That’s why we need nuanced, place-based policies and programs. A one-size-fits-all approach could have unintended consequences,” Ms Ritchie said.
“A blanket policy to bring more land to market should help alleviate under-supply in fast-growing regions but will have no impact on low-growth regions where supply is already plentiful.”
The RAI’s Regionalisation Ambition – a 10-year, 20-goal framework for an Australia where more people live in the regions – aims to see by 2032, the regional rental vacancy rate increase to above 3% and for annual building approvals to keep pace with population growth.
The regional vacancy rate decreased from 1.5% in September 2022 to 1.2% in September 2023 and monthly regional building approvals have been decreasing since August 2021.
Today’s event will focus on three key areas of housing in regional Australia: home ownership; rental market trends and innovation; and social and affordable housing, and homelessness.
What: National Regional Housing Summit
Date: Friday, 9 February 2024
Time: 8:00am – 5:30pm
Venue: Old Parliament House, Canberra
The Discussion Paper and Program for the National Regional Housing Summit can be found here.
KEY REGIONAL HOUSING FACTS:
- Flats or apartments make up just 2-3% of housing stock in some regional markets.
- Regional Australia has a smaller proportion of rental stock (23.3%) compared to Australia's most expensive markets (32.3%).
- The regional rental vacancy rate has decreased from 1.5% (September 2022) to 1.2% (September 2023).
- Between March 2020 and December 2023 median house values in regional Australia grew by 54.2% compared to 29.3% in metropolitan areas.
- Monthly building approvals in regional Australia have been decreasing since August 2021.
- In Australia’s most expensive capital city markets it takes a typical home buyer about 70 years of repayments to own their home; in many regional market types it takes half this time.
- Regional Australia has almost the same number of unoccupied private dwellings as metropolitan areas (519,000 v 524,000).
- Capital city to regional relocations remain almost 12% above the pre-COVID average.
For media enquiries contact:
Regional Australia Institute
Ph: 0498 373 300
E: [email protected]
Real Estate Institute of Australia
Ph: 0413 600 350
E: [email protected]
Master Builders Australia
Ph: 0400 493 071
E: [email protected]