New AHURI study highlights chronic labour shortages as top barrier to boosting regional housing supply

A new study into the challenges faced by Australia’s regional housing markets has found providing a secure pipeline of work would help address the chronic labour shortages crippling them. The Australian Housing and Urban Research Institute research singled out the regional skilled workforce shortage as the “greatest challenge” to boosting regional housing supply. While Kalgoorlie-Boulder boasts relatively affordable house prices, the rental market is the 10th most expensive across Australia’s top 50 non-capital urban areas, with median weekly rentals sitting at $614 in July, according to CoreLogic. This trend was in line with the AHURI study, which found the greatest housing affordability challenges in rural Australia were in the rental sector. The report said regional areas faced unique challenges because of the smaller scale, difficulties in sourcing a local labour force, limited number of builders and the additional costs associated with being further away from suppliers. Research author and University of South Australia Professor Andrew Beer said 60 per cent of respondents to the study’s survey identified “resource impediments” as the top barrier to delivering affordable housing supply. “Limited support from State and Federal Governments was also considered a major barrier by a similar number of respondents — 57 per cent for State Governments and 49 per cent for Federal,” Professor Beer said. “Survey participants widely acknowledged the absence of new investment in social housing provision was affecting the growth of the overall housing stock across regional Australia. “Interestingly, factors often considered to be a barrier to new housing supply — such as planning permission — were not considered significant impediments in most regional housing markets.” The AHURI report said Government action would be needed to “unfreeze” regional housing markets. Providing a “secure pipeline” of work for builders was identified as an avenue to help attract and retain labour in the regions. It suggested this could be done by regional housing providers taking advantage of the existing Housing Australia Future Fund, but highlighted that the program was not designed for easy adoption in the regions. There was also strong support in the study for additional funding from State and Federal Governments for the provision of additional social housing. “Without intervention, housing in these communities will not keep pace with demand, placing further pressure on metropolitan housing markets,” the report said. “It is critical that policies developed for rural and regional housing needs are tailored to each place, or cluster of places, rather than as a one-size-fits all approach. “Relatively small public sector interventions are likely to deliver substantial benefits to future generations of residents.”