Migration from capital cities to regions puts the squeeze on affordability
National home prices rose by a further 2.2 per cent in May, according to the CoreLogic home value index released on Tuesday. For the year prices are 10.6 per cent higher, while new house approvals rose to a new record high.
The CoreLogic home value May index increase was just shy of a staggering 2.8 per cent surge in March.
FlowNews24 caught up with federal shadow minister for housing and homelessness Jason Clare MP on federal budget day - the full interview is in the FlowNews24 podcast player. The article continues further below:
The data shows regional Victorian prices were running hot, increasing 1.7 per cent for a quarterly rise of 6.2 per cent. By contrast, metropolitan Melbourne home prices increased 1.8 per cent in May to post a 5.5 per cent increase.
The data also shows regional New South Wales house prices surged 2.5 per cent in the past month, more than any other regional area in the nation, to chart a total 18.6 per cent increase over the past 12 months. Regional New South Wales' figures for the year are second only to Darwin (20.3 per cent) compared to any capital city or regional parts of their states.
Regional South Australian prices grew 12.4 per cent over the last year, just 0.1 per cent in the last month compared with Adelaide up 1.9 per cent. Adelaide's 12-month growth is fractionally behind regional SA, at 12.4 per cent.
Recently, federal shadow minister for housing and homelessness, Jason Clare, told Flow News 24’s Jason Regan that people flocking to the regions has hiked house prices in regional areas:
“In 2019, the year before the pandemic, 134 people left regional South Australia, net, so the population in regional South Australia declined.
“Last year (2020), the population of regional South Australia increased by 1,300, that gives you an idea of what is happening in South Australia.
“In regional Victoria, it’s ten times that.
“Thirteen thousand people net have moved from capital cities to regional Victoria, so that explains why this phenomenon is happening, why rents are going through the roof.
“It’s getting harder to live in the regions, because the cost of housing is going through the roof.”
According to the Australian Bureau of Statistics (ABS), building approvals for new private sector houses also rose by a further 4.6 per cent in April to 15,063 - a new record high.
ABS officer Daniel Rossi said:
"Since the introduction of HomeBuilder in June 2020, private house approvals have risen 84 per cent.
"Such a synchronised upswing is an absolute rarity across Australia's diverse array of housing markets.”
Everybody's Home - a national campaign to end homelessness - said the market's heat would price many out while generating unsustainable debt for many new purchasers.
Campaign spokesperson Kate Colvin said:
"The best solution to this runaway housing market is an expansion of social and affordable housing.
"We need to release the housing pressure by giving more options to those who can't participate in the boom.
"Cheap money is like rocket fuel for house prices.”
"Social and affordable housing is a big part of the answer.
"It can moderate the effect of higher house prices and higher rents by giving those on low and modest incomes a realistic alternative."
An Anglicare Rental Affordability Snapshot released last month confirmed it's almost impossible for some people to access private rental housing.
Anglicare surveyed more than 74,000 rental listings across Australia, finding:
859 were affordable for a person on the minimum wage.
386 rentals were affordable for a single person on the Age Pension.
236 rentals were affordable for a person on the Disability Support Pension.
3 rentals, including share houses, were affordable for a person on JobSeeker.
0 rentals, including share houses, were affordable for a person on Youth Allowance.
Shadow minister Clare had flagged the concern about rent affordability and the need for social and affordable housing:
“The regions are copping the brunt of this in terms of places to live, places to rent.
“Rents are going through the roof, vacancy rates are going through the floor and local communities are trying to deal with this rush of people that they didn’t expect in the space of twelve months.
“The reality is both (Federal and state governments) need to be investing in building more affordable housing and more social housing, particularly in the regions, where there’s a massive shortfall.
“A big role that the government can play here in Canberra is to help the regions by building more social housing in the places that need it most (regional Australia).
“How do you get someone to come to town to build a house, if they don’t have a house to live in?