Regional Australia is booming. But this housing policy is about to bust

But key regional housing figures have set alarm bells ringing.

Over the last three years, the median dwelling value in regional Australia has increased by more than 54 per cent to almost $606,000 - roughly the same price of a city pad back in at the end of 2020.

At the same time, building approvals across the regions have not kept pace with population growth, so in many communities supply is a significant issue.

So, if the city's expensive, and demand for a life in regions continues, the housing crisis we are now facing as a nation will only get worse, unless there is intervention - both now and long term.

The stark reality is, there is no third option.

Regional housing needs laser focus, right now. Highlighted in last year's Intergenerational Report, regional Australia will play a big role in "future Australia". The regions are at the forefront of our nation's economy particularly as it transitions to net zero.

Preliminary modelling from Jobs and Skills Australia shows Australia will need between 26,000 to 42,000 more electricians in the next seven years, whilst the clean energy workforce is expected to grow from its current 53,000 person workforce today, to 84,000 by 2050. At the same time, almost 2 million workers in building and engineering trades are expected to be required. Jobs and Skills Australia states growth in these occupations is likely to be concentrated in regional Australia.

This is the same regional Australia where more 600,000 capital city dwellers moved to between 2016 and 2021. The same regional Australia where metropolitan to regional relocations remain above the pre-COVID average.

The same regional Australia where, throughout 2023, job vacancies hovered at about 90,000 per month. This is why we need to act now on housing in regional Australia.

For too long regional Australia has been grouped as a singular place, subject to one-size-fits-all policies. But regional Australia is not homogenous. It's made up of thousands of communities, each with its own housing challenges and characteristics.

In some communities there are hundreds of properties currently available to buy and rent, in others as has been much discussed, supply has been outstripped by demand. It is why nuanced, place-based solutions need to be devised. A blanket policy to bring more land to market should help alleviate under-supply in fast growing regions, but it will have no impact on low-growth regions where supply is plentiful. Initiatives need to be adaptable to deliver results in all areas, not just a select few.

Regions need a far greater diversity in their housing stock. Regional Australia Institute analysis has found that flats and apartments make up just 2-3 per cent of the housing stock in some regional markets, compared to more than 42 per cent in metropolitan Australia.

Communities are crying out for smaller, more affordable properties. Regional Australia is maturing, and so too now must its housing stock.

So, how can we start to do this? The institute would like to see a minimum of 40 per cent of the Housing Australia Future Fund invested in regional areas. An investment target of 40 per cent, is not arbitrary, rather it reflects the proportion of the Australian population not living in a major city, being 37.08 per cent as of 2022.

With the expectation that regional growth will continue, the institute believes the 40 per cent proportion is a sustainable minimum for investment. This also reflects the need for government, at all levels, to play much needed catch up for social and affordable housing in our regions.

Housing is not the remit of any one government or organisation. It has buy-in from many sectors and people. There is no denying housing is a key priority of federal and state governments - the Housing Accord is testament to that. What is lacking though is detail about how the accord's 1.2 million new homes will be delivered over the coming five years, particularly in a regional context.

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We would urge government to consider this detail and to prioritise regional Australia to prevent these current challenges from threatening the liveability and potential growth of our regions.

This is not a case of "build it and they will come" - they're already here and more want to come. If we don't focus on regional Australia's housing situation now, the impact will be felt nationwide.

Regional Australia is the new frontier and we must now equip it with the infrastructure it needs to ensure it can lead our country into the future.

We must plan, invest, and secure the vision of rebalancing the nation on every measure - but housing holds the key to unlocking this aspiration.