The Regional Australia Institute (RAI) has today released a suite of solutions to increase the supply of more affordable and appropriate housing across regional Australia to meet current and future demand.
A Regional New Home Loan Guarantee, incentives for regional tradespeople, easing restrictions on relocatable homes, building more medium-density and social housing are among the measures proposed in the RAI’s latest discussion paper: Building the Good Life – Meeting the demand for regional housing.
RAI CEO Liz Ritchie and the Victorian Minister for Regional Development, the Hon Mary-Anne Thomas, will launch the Institute’s discussion paper at the Regions Rising event in Bendigo today.
“The global pandemic created a societal shift in our nation which resulted in more regional people staying in regions, and record interest in and movement to the regions. This has led to a tightening in supply across our regional housing markets, which in turn has created a set of unforeseen challenges for many local economies,” Ms Ritchie said.
Victorian Minister for Regional Development Mary-Anne Thomas said the past two years have brought about unprecedented challenges for our regions – from drought, bushfires and the pandemic – but this has also created opportunity to pivot local business and industries and led more people to consider life outside of the city.
“This report calls for action from all levels of government: federal, state and local,” Ms Thomas said.
“Victoria is keenly aware of the housing challenges impacting our regions right now – it’s why we’ve committed to the Big Housing Build – the biggest investment in social and affordable housing this nation has seen with 25 percent of our $5 billion investment guaranteed for regional Victoria,” Ms Thomas continued,
“But with historic highs of migration to our regions, we know there’s more to do and Victoria stands ready to support our regions to manage the challenges that this growth can bring,” Minister Thomas concluded.
The RAI’s latest research details the current pressures on regional housing markets, their causes and options for addressing them – but the most critical finding is that housing investment has not kept pace with population growth. This has created a shortage of suitable housing which policy makers and industry are now responding to.
“We have various drivers and quite distinct regional housing markets. Responses must be tailored to address the drivers specific to each regional housing market. Imposing the wrong policy response can make market failures worse,” Liz Ritchie said.
“While we welcome both the Federal Government’s Budget commitments to address housing affordability in regions as well as the Opposition’s recent plan – these measures address only one part of the puzzle,” Liz Ritchie said.
Over the past two decades when affordability was better, the RAI research shows, the only meaningful boosts to regional housing supply have come from temporary government stimulus measures, such as the first homeowner grant and, more recently, the Homebuilder scheme.
“While governments at all levels can play a vital part in boosting housing supply and affordability, industry and regional leaders also need to come to the table,” Ms Ritchie said.
“In the decade to 2020, 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.
“Our research has found that residents in at least 20 percent of all Local Government Areas (LGAs) across regional Australia face 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.
“Our proposal of a Regional New Home Loan Guarantee would be backed by the Federal Government and could ease finance barriers in around 80 Local Government Areas (LGAs) which include Coonamble, Broken Hill, Cloncurry, Longreach, Tatiara, Port Pirie, Burnie, Circular Head, Hindmarsh, Northern Grampians and Katanning.
“Our discussion paper also identifies policy options to address trade labor shortages in regions, including incentives for tradies to head to the regions,” Ms Ritchie said.
“With more than 70,000 regional job vacancies, there’s a widespread need for units, townhouses, and apartments in regional Australia to accommodate single professionals and tradespeople, as well as long-term residents looking to downsize.
“State and local governments need to work with developers and builders to ensure a greater diversity in housing stock so that new housing remains affordable,” Liz Ritchie said.
“The RAI looks forward to leading an informed discussion amongst policy makers, industry participants, and regional stakeholders to restore balance in the regional housing market and boost supply.
“Australia is experiencing a dramatic time in history. The COVID pandemic has prompted many metropolitan Australians to reflect on their values, and their lifestyle. More people than ever are looking to a life in the regions.
In December 2021, the RAI’s Move to More Campaign Advertising tracking survey revealed that finding suitable housing was now a higher priority when considering moving to regional Australia than having a job secured.
“Both housing and jobs are significant building blocks to achieving Regionalisation in this country – where we see a more equitable, balanced, sustainable, and prosperous country.
The RAI has also today released its Regionalisation consultation paper: Rebalancing the Nation. This paper kicks off the process for developing the 10-year National Regionalisation Framework that will be launched at the RAI’s National Summit in Canberra on 17-18 August.
Submissions to the RAI can be made via [email protected]. For further information, and a copy of the paper, please click here.
For the full regional housing discussion paper, Building the Good Life, click here.
Media are invited to attend Regions Rising Bendigo either in person or virtually, but please REGISTER HERE for free tickets.
Examples of LGAs that might be eligible for the Regional New Home Loan Guarantee
NSW Central Darling
NSW Broken Hill
VIC Northern Grampians
QLD North Burnett
SA Northern Areas
SA Mount Remarkable
SA Port Pirie City and Dists
TAS West Coast
TAS Circular Head
TAS George Town
TAS Derwent Valley
WA East Pilbara