Regional Australia Institute has released a suite of solutions to increase the supply of more affordable and appropriate housing across regional Australia to meet current and future demand.
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A Regional New Home Loan Guarantee, incentives for regional tradespeople, easing restrictions on relocatable homes, building more medium-density and social housing are among the measures proposed in the RAI's latest discussion paper Building the Good Life - Meeting the demand for regional housing.
RAI chief executive Liz Ritchie and the Victorian Minister for Regional Development Mary-Anne Thomas, launched the Institute's discussion paper at the Regions Rising event at the All Season's Resort in Bendigo on Monday.
"The global pandemic created a societal shift in our nation which resulted in more regional people staying in regions, and record interest in and movement to the regions," Ms Ritchie said.
"This has led to a tightening in supply across our regional housing markets, which in turn has created a set of unforeseen challenges for many local economies."
Ms Thomas said the past two years had brought about unprecedented challenges for the regions - from drought, bushfires and the pandemic - but also created opportunity to pivot local business and industries and led more people to consider life outside of the city.
"This report calls for action from all levels of government; federal, state and local," she said.
"With historic highs of migration to our regions, we know there's more to do and Victoria stands ready to support our regions to manage the challenges that this growth can bring."
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The RAI's latest research details the current pressures on regional housing markets, their causes and options for addressing them - but the most critical finding is that housing investment has not kept pace with population growth.
This has created a shortage of suitable housing which policy makers and industry are now responding to.
"We have various drivers and quite distinct regional housing markets and responses must be tailored to address the drivers specific to each regional housing market, because imposing the wrong policy response can make market failures worse," Ms Ritchie said.
"While we welcome both the federal government's Budget commitments to address housing affordability in regions as well as the Opposition's recent plan - these measures address only one part of the puzzle."
Over the past two decades when affordability was better, the RAI research shows the only meaningful boosts to regional housing supply have come from temporary government stimulus measures, such as the first homeowner grant and, more recently, the Homebuilder scheme.
"While governments at all levels can play a vital part in boosting housing supply and affordability, industry and regional leaders also need to come to the table," Ms Ritchie said.
"In the decade to 2020, regions grew by an average of 76,500 people per annum, but over the same period, homes approved for construction dropped in five out of those 10 years.
Research has found residents in at least 20 percent of all local government areas across regional Australia face significant barriers to accessing housing finance.
City home buyers may require a 10 or 20 percent deposit, whereas in more remote regional markets borrowers may need double that.
"Our proposal of a Regional New Home Loan Guarantee would be backed by the federal government and could ease finance barriers in around 80 LGAs," Ms Ritchie said.
"Our discussion paper also identifies policy options to address trade labor shortages in regions, including incentives for tradies to head to the regions.
"With more than 70,000 regional job vacancies, there's a widespread need for units, townhouses, and apartments in regional Australia to accommodate single professionals and tradespeople, as well as long-term residents looking to downsize.
"State and local governments need to work with developers and builders to ensure a greater diversity in housing stock so that new housing remains affordable."
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