As the cost of living continues to soar, some metropolitan dwellers are considering leaving the city in search of a more affordable and comfortable regional lifestyle. But while many regional areas have the potential to accommodate more people, we shouldn’t expect a change of scenery to be the right move for everyone.

Dr Laura Crommelin, Senior Lecturer in City Planning at the School of Built Environment, UNSW Arts, Design & Architecture, says it would be unrealistic to rely on smaller regional cities to solve the housing problems of major metropolitan areas.

“Our major cities continue to offer a broader range of employment opportunities, which means they will continue to attract new residents. So, it’s unlikely smaller regional areas can substantially ease pressures for major cities, at least in the short-term,” Dr Crommelin says.

“And in any case, we’re seeing that rapid growth without proper planning can replicate some of the problems we face in urban areas in regional areas, such as housing affordability.

“So we risk losing features of regional life that are often what attract people to move in the first place.”

Housing demand in the regions

While some remote areas of inland Australia have stagnated or even experienced population decline, others are already struggling to deal with increased migration from the pandemic and the rise of remote work. Some coastal regions, in particular, have experienced a significant influx of sea-changers in recent years motivated by cheaper, more spacious housing on offer by the beach.

“Some who are priced out of the city housing markets may be able to afford a more spacious, standalone dwelling in a regional area,” Dr Crommelin says. “Those regional areas within striking distance of the city are increasingly popular with those who still might commute once or twice a week to the city for work, but spend most of their time living by the coast.”

Rapid growth can also have similar effects on regional rental markets. Demand for affordable rental properties is already exceptionally high in some regions. Shortages can drive up asking prices and threaten to push residents into rental stress or out of their towns entirely. Similarly, the rise of short-term letting platforms like Airbnb may also take potential housing supply out of the market, particularly at peak times of year.

“Housing affordability is a significant issue now in regional areas that are growing quickly,” Dr Crommelin says. “If people moving out from the big cities can come in with higher paying salaries and push prices up, it can create resentment.”

Read more: Report highlights post-pandemic housing affordability pressures and rapid rent inflation

An Australian Housing and Urban Research Institute (AHURI) study led by Dr Crommelin published last year found regional residents are also concerned about growth diminishing the lifestyle appeal of their cities while stretching essential services further.

“There is a concern that rapid growth outpaces investment and places more pressure on existing services – particularly health and education,” Dr Crommelin says. “It’s something policymakers need to anticipate and get ahead of so that infrastructure development can support growth, not just follow it.”

Managing growth in regional Australia

Rather than perceiving the regions as a solution to metropolitan population pressures, Dr Crommelin says policymakers should instead consider how population growth can help regional Australia.

“Proactive, strategic planning informed by local knowledge can ensure population growth benefits regional cities and their residents first through improved local services, infrastructure and amenity.”

A primary focus should be improving regional labour markets to attract and retain more population, particularly in fields where worker shortages exist. This would not only include creating more high-quality employment opportunities, but better supporting long-term career paths in non-metropolitan areas.

“Reduced employment and career development options are considered a downside of relocating. There’s certainly a role for regional universities and campuses to help create local graduates, but how best to help them build a fulfilling career in non-metropolitan Australia is something we’re interested in looking into further,“ Dr Crommelin says.

Long-term management strategies should also recognise the diversity and needs of different regions. For example, there may be a greater need in some to build medium and lower-density housing stock to cater to demand from families. Others may require better transport services to connect them with major cities or building facilities to host more entertainment and sporting events.

“Most importantly, growth needs careful management to ensure if regional Australia areas scale up, they maintain the overarching sense of community that make these areas appealing in the first place,” Dr Crommelin says.

A new AHURI project involving Dr Crommelin, Disruption in regional housing: Policy responses for more resilient markets, will look closely at the actions governments can take to ensure Australia’s regional housing markets can best respond to challenges now and in the future.