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Rents in regional NSW towns have skyrocketed by up to 27 per cent in the past year, and the regional rental market’s growth is outpacing Sydney.
Some of the sharper rises were in smaller towns outside larger regional centres, as prospective tenants look further afield for cheaper options.
Asking rents for the median house in regional NSW overall rose 5 per cent in the year to March, reaching $630 a week, Domain’s latest Rental Report, released on Thursday, showed.
Sydney’s median house rent rose 2.6 per cent over the same time, albeit to a pricier $800 a week.
The steepest hike in asking rents in regional NSW was in the Yass Valley local government area outside Canberra, up 27.3 per cent to $700 a week.
It was followed by Liverpool Plains near Tamworth, up 20.5 per cent to $470, then Temora near Wagga Wagga, up 18.4 per cent to $450.
“The dynamics of affordability are playing out in the regions, just as they’re playing out in the cities,” said Domain chief of research and economics Dr Nicola Powell. “We’re seeing a lot of challenges around affordability, displacement and changed decisions.
“Rents are still often quite low in the regions but they’re rising faster so cost-of-living pressures are going to be felt acutely. Consumer sentiment is now just off the record [low] levels seen during COVID too, so everyone’s having to make decisions on how to make their budgets work, and these rents aren’t helping at all.”
Liz Ritchie, chief executive of the Regional Australia Institute, says a lot more housing needs to be built in the regions to cope with the increasing demand from a population which has just hit 10 million, to make sure rents, and house prices, are affordable again.
“Regional Australia remains an attractive proposition for city dwellers, and we know more than one in three city-based Australians are considering a move, which is more than 5.3 million people,” she said.
“But we continue to argue for infrastructure support to ensure that move is a smooth one, and we are calling for 40 per cent of the 1.2 million National Housing Accord houses to be built in regional Australia.”
Lifestyle factors are driving up the level of rents in the Yass Valley, for example. “There could be a cohort of people relocating from Canberra to Yass and renting before they make the decision to buy,” said Powell.
But, as in many regional areas, there’s also a huge amount of infrastructure spending adding extra pressures. Sophie Curlewis of Yass Valley Property says wind farms and underground electric cabling work has brought many new workers.
“We just don’t have many rentals available now,” she said. “People are finding it a beautiful place to move to and bring up children, but accommodation is difficult.”
It’s the same story for the Liverpool Plains, on the north-western slopes of NSW, with the mines, lots of new work, and projects like the new hospital. “We’re definitely seeing quite a few people moving to places here like Gunnedah,” said Robertson Real Estate’s Chelsea Palmer.
“It’s putting a lot of pressure on the rental market and rents, and prices, are going through the roof.”
PRD chief economist Diaswati Mardiasmo said demand is outstripping supply in regional centres, prompting some workers to look for accommodation in smaller towns nearby.
“If you live in Temora it’s still a bit more cost-effective than Wagga,” she said. “It’s driving rents up because there’s not enough places in the bigger local government area, so people are looking for the areas around them.”
She noted the infrastructure and commercial projects being delivered in some of these areas, including solar and battery farms or shopping centres.
But there were scant new houses being planned for areas such as Liverpool Plains, Temora and Wagga Wagga, she said, adding that there were added transportation costs involved to construct new homes outside the cities.
“It’s a spillover effect from the bigger local areas or markets that are getting all of that commercial infrastructure, industry, development.”
By contrast, the popular and pricey Byron shire ranked fifth on the list of biggest rent hikes, up 15 per cent in a year to a median asking house rent of $1150 a week.
Mardiasmo said some locals are renting in Byron rather than buying due to the area’s high house prices.
Overall, she did not think there was any immediate release to the pressure on regional renters.
“Building houses does take time,” she said. “The only thing that I can see right now is rentals will keep on going up.”
With Elizabeth Redman
