Unplanned Migration and Regional Cities: Australia Grapples with Looming Housing Shortage

Australia faces a projected housing shortage of more than 250,000 homes by 2028 due to an unplanned rise in net overseas migration, according to research by the Institute of Public Affairs (IPA). While many are turning their gaze to regional cities as a potential solution, experts warn this approach might not be sustainable.

IPA’s research predicts that the federal government’s unexpected migration surge, slated to exceed 1.75 million by 2028, will place a considerable strain on the nation’s housing market. The fallout of this shortage won’t be confined to any one area. Every state and territory will feel the impact, with New South Wales bearing the brunt of the shortage, anticipating a deficit of over 70,000 homes. “Every Australian should have the opportunity to own their own home, yet the surge in demand from unplanned migration growth will make housing even less affordable for both Australians and new migrants alike,” said Daniel Wild, IPA’s Deputy Executive Director.

In light of these daunting figures, a number of urban dwellers are contemplating a shift towards regional living. Yet, relying on smaller regional cities to alleviate the pressures of metropolitan growth may not be a viable solution. According to Dr Laura Crommelin, a Senior Lecturer in City Planning at the University of New South Wales, rapid growth without proper planning in these areas could merely replicate the issues faced in urban areas, including housing affordability. “So, it’s unlikely smaller regional areas can substantially ease pressures for major cities, at least in the short term,” she cautioned.

Some regional areas have indeed experienced a significant surge in migration, partially spurred by the COVID-19 pandemic and the rise of remote work. However, this influx of people and the increased demand for affordable rental properties can lead to rising property prices, creating stress on local communities and potentially pushing long-term residents out of their towns. Crommelin notes, “If people moving out from the big cities can come in with higher paying salaries and push prices up, it can create resentment”.

Another side-effect of rapid growth in regional areas is the potential strain on essential services such as health and education. A study led by Crommelin under the Australian Housing and Urban Research Institute (AHURI) uncovered regional residents’ concerns about diminishing lifestyle appeal and overstretched services. “There is a concern that rapid growth outpaces investment and places more pressure on existing services – particularly health and education,” she highlighted.

The solutions proposed by experts include proactive, strategic planning to ensure population growth benefits regional cities, and improving regional labour markets to attract and retain a larger population. Dr Crommelin also suggests better supporting long-term career paths in non-metropolitan areas.

As Australia grapples with the reality of an upcoming housing shortage, the pressure mounts on policymakers to strike a balance between embracing migration, managing the resultant housing demands, and ensuring that infrastructure development can adequately support this growth.

References:

Fiona Killman, “Housing shortage figures from ‘unplanned’ migration revealed by Institute of Public Affairs” https://www.realestate.com.au/news/housing-shortage-figures-from-unplanned-migration-revealed-by-institute-of-public-affairs/ 

Rhys Tarling, “Regional migration alone unable to reduce metropolitan growth pressures” https://thepropertytribune.com.au/market-insights/regional-migration-alone-unable-to-reduce-metropolitan-growth-pressures/