By Katrina Creer
A boom in regional development is adding pressure to the housing crisis in country areas, with some workers forced to sleep in their cars due to lack of accommodation.
Almost three years on from the pandemic, many locals are also struggling to find a home with the influx of city-dwellers to lifestyle destinations, rising immigration and the popularity of short-term holiday letting depleting stock levels. Those looking to relocate to regional areas for work are being squeezed into unsuitable accommodation or turning down jobs due to the housing crisis.
REINSW Chief Executive Officer Tim McKibbin said property managers are often unable to find accommodation for those in need. He is calling on all levels of Government to act and incentivise change.
“There are people who are just outright desperate – they have the means to support themselves and pay rent, but they just can’t find anywhere,” he said.
“The solution conceptionally is very simple; we need more property. It is economics 101 – we talk about people trying to buy or rent a property but there just isn’t enough for the population.”
How big is the problem?
Tracie Robertson, Managing Director/Principal from Ray White Parkes said vacancy rates don’t show the whole picture, instead, she prefers to look at the number of applicants per rental listing.
“We often cap this at 10 per property at peak times, in slower times we receive around three applications per property which sounds like it is improving, but that is still more people than houses,” she said.
Also adding to the pressure are the 220 flood-affected properties in the region, with some 70 homes rendered uninhabitable. Projects such as the Newell Highway upgrade and Inland Rail are expected to draw more people to regional areas, but lack of accommodation is making it challenging. As a result, fewer families are now coming to the area.
“We need skilled workers such as engineers,” said Ms Robertson, who is Chair of the REINSW’s Compass Chapter.
“People come out here for an interview, then call into the agency and when they see there is nothing suitable, they tend to decline job offers. It is hard explaining to tenants that while they may want built-in wardrobes and an ensuite, they are lucky to get a house at all.
“Recently, we were working with a fellow earning $200K a year who had been sleeping in his car.”
What is adding to the pressure?
While there is a push for workers to return to the office, many are continuing to work remotely. Adding to the frustration is that many properties – mostly on the NSW Far North Coast - are sitting empty when not being used as holiday homes or as short-term accommodation.
“Areas under pressure are the places that offer the best lifestyle. Landlords can see they can make more money in the holiday and short-term rental market and retain a lot more control over their property than in the residential market,” Mr McKibbin said.
“We are seeing residential rental property bleeding off into that area, which is exacerbating the problem even further.”
In other areas, Airbnbs are being used to take the overflow of short-term contract workers staying at hotels, motels, caravans and pubs.
What is needed?
Tara Searle, a sales executive with Dubbo Real Estate, said higher rents are putting pressure on local families. Not everyone has access to a vehicle and the lack of public transport makes it unfeasible for some to move further out of town.
The latest Domain Rent Report released earlier this month shows that the median asking rent for houses across regional NSW increased 10.3 per cent last year – from $485 to $535 per week. The biggest jumps were recorded in the Upper Hunter, Muswellbrook, Maitland, Broken Hill and Forbes LGAs up by 14 per cent or more.
Ms Searle believes medium to high-density development is needed. She argues people are just as time-poor in regional areas as in the city and are no longer moving to town in search of a big backyard.
“A development for 48 townhouses has just been approved here which is great, but of course, we needed this all yesterday,” Ms Searle said.
“We can collaboratively work together and keep pushing for more supply and rental properties, but it is not an overnight solution – so, what do we do in the meantime?”.
Why investors are key to the solution
Ms Searle, a member of the REINSW Compass Chapter Committee, is concerned that despite high yields, changes to no-grounds evictions and pets in rental properties could see investors turn away from the regional property market. Instead, she wants to see incentives to keep the market attractive.
Mr McKibbin agrees that quick fixes such as the State Government’s recent ban on rent bidding will have little impact on the problem. He believes such announcements simply divert the community’s attention away from the failure to provide the necessary housing.
Quicker approval for developments and reducing Government taxes/charges on new homes could make a real difference in increasing supply in regional areas.
“The REINSW will continue to lobby the Government and Opposition coming into the election – we want them to be focused on the problem and that is supply,” he said.
“We see symptomatic responses to the problem but what is needed is a proactive approach to deal with supply and until the Government does this, the problem will not just remain but is going to get worse. “