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Sunday, June 26, 2022

Housing shortage hitting regional Australia, leaving lower income earners fearing for future

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As Dr Raphaella Crosby was preparing to return to her hometown, an intense storm ripped through it, tearing off roofs, up-ending trees and splitting power poles.

The severe weather hit Armidale, a picturesque country town in the NSW northern tablelands, in October, damaging the house she was due to move into from the Gold Coast.

Contending with Mother Nature was one thing but finding a house to rent in a regional area would prove Crosby’s ultimate battle.

“I thought, ‘Oh, it’ll be fine, I’ll find something, it won’t be a problem. It’s Armidale’.

“What I didn’t realise is that there was a massive boom. There were so many people like me who no longer needed to live in the city.”

Every community needs critical workers who are not highly paid, like childcare workers, aged care workers, supermarket workers, hospitality workers.

Kate Colvin, spokesperson, campaign group Everybody’s Home

The political researcher applied for about 50 properties, many over $500 a week, staying with friends or in hotels while she searched for two months.

Just before Christmas, she secured a three-bedroom house for $420 a week, more than she’d paid for rental apartments in Queensland and in Bondi Junction.

“The affordability was one issue. The idea I’d be paying more rent in Armidale than the Gold Coast, still grates against my soul. 

“It just seems wrong at the fundamental level.”

Expensive and competitive rental markets are affecting locals and newcomers in regional areas Australia-wide, in part due to the influx of people escaping cities and working remotely from the country or the coast.

Experts say it’s a crisis that will only worsen as demand for regional housing outstrips supply, pushing prices even higher and creating complex, far-reaching consequences for local economies and low-income workers.

Research on rental housing and homelessness from the University of NSW and Australian Council of Social Service shows a rapid increase in rents from mid-2020, the fastest in over a decade.

… private market rents will rise between $100 and $200 a week over the next year in 54 regional centres including Bundaberg in Queensland, Geraldton in WA, Victoria’s Lorne, Mt Barker in SA, Burnie in Tasmania and Dubbo in NSW.

Head of research at Propertyology, Simon Pressley

Those in the regions surged 12.4 per cent in the year to August 2021. By comparison, wage growth sat at 1.7 per cent.

Head of research at Propertyology Simon Pressley predicts private market rents will rise between $100 and $200 a week over the next year in 54 regional centres including Bundaberg in Queensland, Geraldton in WA, Victoria’s Lorne, Mt Barker in SA, Burnie in Tasmania and Dubbo in NSW.

He says rental shortages were evident five years ago when vacancy rates in some areas were under two per cent.

“Two years ago, COVID turned the world upside down but the problem was already there.

“In some of those locations it was already showing up in spikes in rents, and other locations had just reached the critical supply shortage.”

On top of pandemic pressures, the demand for rentals is driven by everyday factors like people relocating for new jobs, divorced couples looking for separate houses and young adults moving out of family homes.

In the private market, Pressley says, there’s a lot of bureaucratic “grit” and regulation that discourages investors from becoming landlords on top of increasing land tax, insurance and maintenance costs.

When there is unstable housing, people become more stressed and there’s greater concerns for mental health and anxiety. These people may turn to drugs or alcohol to get through and addictions start to form, which creates unhealthy relationships, and we have increased family and domestic violence. 

Mission Australia community services executive, Ben Carblis

Many investors see the benefits in leasing properties as holiday homes through services like AirBnb, an issue that prompted a parliamentary inquiry in WA and caps on short-stay accommodation in several regional areas.

But advocates for affordable housing say a deeper problem lies in the severe shortage of social housing and subsidised rentals set aside for low-income earners.

Kate Colvin, from campaign group Everybody’s Home, says expensive rents and property shortages can affect an entire regional town.

“Every community needs critical workers who are not highly paid, like childcare workers, aged care workers, supermarket workers, hospitality workers.

“They’re a band of workers who are paid below $25 an hour.

“It’s pretty much impossible for people in that wage bracket, particularly if they’re part-time employees, to find somewhere in communities that were previously considered affordable. 

“So for some communities, that means it can exacerbate shortages in those workforces.”

Everybody’s Home is campaigning on several fronts: to make it easier and fairer for first-home buyers, for greater protections for tenants, and a strategy to end homelessness.

What we’ve experienced here, with the migration of city residents to regional areas, it’s no longer peaks and troughs, it’s just a peak. We really are in a crisis.

Ben Carblis

The group wants the Federal Government to develop a national housing plan that includes developing more social housing and a new tax incentive to encourage private sector investment in properties targeted at low and middle income earners.

Mission Australia community services executive Ben Carblis says it used to deal with peaks in rental stress during summer when landlords moved their short-term tenants out to accommodate tourists.

“What we’ve experienced here, with the migration of city residents to regional areas, it’s no longer peaks and troughs, it’s just a peak,” he says.

Low-income are moving away from major centres, which tend to have better access to medical and social services, to remote and isolated communities.

This has serious consequences for already vulnerable people, Carblis says.

“We really are in a crisis.

“When there is unstable housing, people become more stressed and there’s greater concerns for mental health and anxiety.

“These people may turn to drugs or alcohol to get through and addictions start to form, which creates unhealthy relationships, and we have increased family and domestic violence. 

The real solution is to put more properties into the market because otherwise it’s just a game of musical chairs. Unless you add more chairs, someone’s always going to miss out.

Kate Colvin

“So there can be a downward spiral when the stress and anxiety of not having a stable home is there.”

In its pre-budget submission to the federal government, Mission Australia provided estimates that 614,000 social dwellings and 277,000 affordable dwellings worth $290 billion will be needed in the next 20 years. 

“The solution is simple but it’s expensive,” Carblis says.

Colvin says the problem touches everyone looking for a place to live.

Competition means houses once considered low-rent are now leased at mid-range or high prices.

“The real solution is to put more properties into the market because otherwise it’s just a game of musical chairs.

“Unless you add more chairs, someone’s always going to miss out.

“It’s a huge squeeze everywhere.”

Crosby has settled into her new home in Armidale but almost gave up and turned her back on regional living.

“Lots of people who grew up in Armidale have very fond memories of growing up here. We want to come home,” she says.

“One of my values is if I didn’t need to be in a city, I shouldn’t be. Regional communities need people and they need business. 

“It’s a value I’ve had my whole life.”

AAP

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