A tight housing market is leading to higher rents in the regions. Photo: Chris Roe.
If you’re in the market for a rental property in Wagga, a scroll through the local real estate sites can be a discouraging experience.
Demand is at an all-time high, vacancy rates hover around zero per cent and prices have risen accordingly.
A three-bedder is renting for an average of $440 per week and some smaller places cost more than the equivalent in Melbourne.
While there are signs that the rush to the regions is easing, Wagga remains a destination of choice for tree changers.
The Regional Australia Institute and the Commonwealth Bank’s Regional Movers Index shows that migration to the LGA has dropped 45 per cent since March, but we are still up 36 per cent on last year.
The Regional Australia Institute’s CEO Liz Ritchie hopes the easing of movement to the regions will provide breathing space to plan for the future.
“We know people are happier when they choose a life in the regions, but investment in creating a sustainable model for Regional Australia to accommodate the changing nature of our population trends is needed,” she says.
In the meantime, things in Wagga remain tight; rents are rising, but wages are not.
Deputy Mayor Jenny McKinnon has backed a call by the Greens to freeze rent prices for the next two years following reports that rents nationwide have increased seven times faster than wages over the past two years.
“Housing is a human rights issue,” she says.
“We should be thinking about making sure that everybody has a roof over their head at an affordable price and stop just thinking of it as a supply and demand problem that will be solved by the market, because it clearly is not.”
Cr McKinnon explains that the rental freeze is just one aspect of the proposal.
“It’s a response to the current housing crisis, but in addition to that, there needs to be an ongoing approach like a cap on rental increases that more reflects CPI,” she says.
“That then also reflects the sorts of costs that landlords have around insurances and maintenance costs because that’s all linked to the CPI.”
Simon Freemantle from PRD agrees that we are in the middle of a housing shortage, but warns against governments engaging in “market manipulation” and suggests that regulatory restrictions discourage would-be investors.
“There’s no reason for them to become involved in prices unless they want to reduce the margin that the landlord’s receiving,” he explains.
“If rental prices cap out, and then interest rates go up, then the returns stop you from wanting to be an investor.
“Most of our landlords are just bread and butter, husband and wife investors that are trying to get a little bit in front in life.”
Mr Freemantle says there are other factors like the boom in the short-stay market and a lack of investment in social housing that are adding to the squeeze.
“In the Airbnb market people can get an income out of houses that is higher than the rental market,” he says.
“A lot of the rental crises is down to social housing that hasn’t been replaced.”
Mr Freemantle says we need urgent investment in a diverse range of affordable and social housing in areas in dire need of an overhaul.
“That’s the quickest way to create more affordable housing because you’ve got the infrastructure already there and some of the blocks are pretty big,” he says.
“You’d just have to modify each so instead of being two houses on two blocks, there’ll be three houses on two blocks.”
While Cr McKinnon and Mr Freemantle disagree on the role of ‘the market’ in providing relief, they do agree that a broad approach is required to deliver a diverse range of housing options.
“I was very supportive of the new Rowan Village mixed-density development,” says Cr McKinnon.
“I think we’ve seen that single women, in particular, are vulnerable in the housing crisis and I liked the inclusion of higher density housing close to the shopping services, seniors housing and the childcare centre.”
The NSW Government announced last week that it had accepted 15 recommendations put forward by the Regional Housing Taskforce to reduce some of the red tape surrounding residential development.
Regional councils in NSW can apply for grants of up to $250,000 to help speed up housing delivery.
Liz Ritchie from the Regional Australia Institute is also calling for a federal plan to help regional communities to get on the front foot.
“Now is the time for a new National Population Plan at the Federal level, that considers future settlement patterns to ensure regional communities have the services and infrastructure they need to help them grow.”
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