Forgotten but not Gone: The Housing Markets of Australias
Country Towns Professor Andrew Beer and
Forgotten but not Gone: The Housing Markets of Australias
Country Towns
Presentation to The Sustainability of Australias Country Towns
ConferenceLa Trobe UniversityOctober 1 2010
Professor Andrew Beer and Dr Selina TuallyHousing, Urban and
Regional Environments Research GroupSchool of Social
SciencesUniversity of Adelaide
1IntroductionProject for AHURI: Drivers of supply and demand in
Australias rural and regional housing marketsteam from Flinders
University (now Adelaide University), Curtin, RMIT15 case studies
of housing markets (all States and NT)focus: impact of current
suite of housing affordability programsPaper focuses on three case
studies somewhat typical of country towns in AustraliaMajor themes
of:Housing affordability and housing stressInadequate housing
supply processesQuality of housingRelationship between housing
markets, labour markets and economic development
Introduction40 per cent of Australias population lives in rural
and regional Australiaonly 4 per cent of households resident on
farmsSignificant diversity in settlement typessome towns growing
stronglysome stagnantsome in undeniable declineSignificant debate
around future of towns particularly over last decade, due
to:economic and demographic change, including exodus of
youthindustry restructuring and variable economic development
outcomesrationalisation of government services seachange and
treechange movementsMiningimpact of anthropogenic climate
change
Housing affordability and housing stressOn average housing
stress around 8 per cent for purchasers and 20 per cent for
rentersRoughly equal to metropolitan ratesLower house prices offset
by lower average incomesVery acute in some locations e.g. mining
towns and resort townsSome places in excess of 50 percent in
private rental sectorHousing stress discourages economic growth as
labour cant move to region
Housing affordability and housing stress
Source: ABS Census 2006Inadequate SupplySmall scale building
industry with labour force shortagesInadequate zoning of land in
many placesReluctance to consider denser housing forms or
alternative housing community perceptions and resistance to
affordable housingLimited investment in private rental
housingFailure of central government processeswith exception of
FHOGlimited impact of current suite of government housing
programssell off of government owned housing
Quality of HousingSome centres affected by overcrowding and low
housing standardspossible impact on heath?Reflects history of under
investment in housing stock in past in some markets+ high cost of
housing constructionImpact of access to servicesEstates of older
run down public housing
Relationship between housing and economyHousing markets and
labour markets inextricably linkedPost-productivist
landscapesgenerate new relationships between housing and the
economy as housing per se becomes the market for goods and
serviceseg Apollo BayLack of affordable housing a brake on economic
development in many townsMining industry has generated a whole new
dynamicmuch greater volatilityFailures of labour markets in some
communities reflected in housing standardsincluding Indigenous
communities
Case Study: Lismore, NSWPopulation 20,000Traditional regional
centre, now with University.Unafforable housing, because:regional
affects with seachange migration impact of student populationlow
incomes in regionIndigenous population, suffers
discriminationlimited supply of land for developmentlimited take-up
of new government initiatives including NRAS
Case Study: Zeehan and Queenstown, TasTwo townships on remote
West Coast of TasmaniaZeehan population: 850Queenstown population:
2,100Both predominately mining communities
Zeehan and Queenstown are two townships on the remote West Coast
of TasmaniaZeehan population: 850Queenstown population: 2,100
Both are predominately mining communities
The housing markets in these towns highlight a range of
important issues for housing markets in country towns.
10Case Study: ZeehanZeehanInteresting case study in house price
movements, due to:Honour of numerous exposs on town was cheapest
place in Australia for housing!significant investor interest;
anticipation of mining boomRecent short-lived mining revival
Avebury nickel minecommissioned June 2008care and maintenance in
December 2008GFC hit hardMine opening and closure: sharp and
immediate effect on house prices
ZeehanI find Zeehan to be a particularly interesting case study
in house price movements (particularly from 2003-2008).
This is due to a range of reasons.
The town had the Honour of numerous exposs on town ACA story as
cheapest place in Australia for housing!
significant investor interest; anticipation of mining boom
three significant mainland investors during this time bought up
big in the town in excess of 30 properties each and effectively
controlled the rental market for a time.
The town recent experienced a short-lived mining revival centred
on the Avebury nickel mine
This mine was commissioned June 2008 and put into care and
maintenance in December 2008 as a result of the GFC
The Mine opening and closure: had sharp and immediate effect on
house prices demonstrating the strong links between the town and
local and global economic conditions as is the case in many
regional and rural communities11Case Study: ZeehanZeehanMovements
from low base Around $10k early 2000s; to $80 k post-ACA story;
then as high as $150-180k at time of mine opening; back to $100k
now Currently: no market turnoverInvestor defaultsDepressed market
business closuresWaiting game for mine opening; some whispers but
nothing confirmedCurrent situation: declining town, poorly
maintained stock, lack of services and funding for services and
local infrastructure
ZeehanZeehan Has seen interesting price movements Around $10k
early 2000s; to $80 k post-ACA story; then as high as $150-180k at
time of mine opening; back to $100k now
Currently: the market has no turnover and is clearly a Depressed
market. When I was there in mid April a significant town business
was closing, following a long line of closures for a small
town.
And, the three significant investors I mentioned just before,
well they have all defaulted on their loans and it is a sad
exercise driving around the town and seeing the foreclosures
notices and houses in complete disrepair.
Despite this, many locals are positive about the future of the
town and are really playing the Waiting game. Waiting for the mine
to reopen, there have been some whispers about this, but nothing as
yet.
So the current situation facing Zeehan then is that of a town in
decline, with poorly maintained stock, lack of services and funding
for services and local infrastructure12Case Study: ZeehanZeehan
Discuss pics13Case Study: QueenstownQueenstownCommunity with
long-standing history of mining.Some of workforce lives locally,
some mine workers drive-in/drive-out Generally male workers whose
families live in more desirable and well serviced locations on the
north west coastHousing cheap by Tasmanian and Australian standards
many properties sub $150kStrong house price growth across region
2003-2008 in particular; tailing off post-GFC and with volatility
in labour market and commodity marketsGrowth again from low
base
Ok, so turning now to Queenstown
Queenstown is a community with long-standing history of
mining.
Some of workforce lives locally, some mine workers
drive-in/drive-out
These workers are Generally male workers whose families live in
more desirable and well serviced locations on the north west
coast
Housing in the town is cheap by Tasmanian and Australian
standards and many properties are sub $150kThe town has seen Strong
house price growth across region from 2003-2008 in particular;
tailing off post-GFC and with volatility in labour market and
commodity markets
Like Zeehan house price appreciation in the town has been from a
low base
How low this base was demonstrated to me by a number of
stakeholders who noted that in the 1990s many properties changed
hands for a carton of beer on Friday nights and one local informant
noted an instance when 6 blocks sold for $50 and this was only 20
short years ago!
In the Mid 2000s local real estate agents had thousands of
enquiries for listings in area as land was $6-8k but no services,
difficult terrain
14Case Study: QueenstownQueenstownKey challenges in area:Quality
of housing for $sStock rapidly ageingPoor quality of stock
concerning in what is a harsh environmentCostly to build in region
(30% more than Hobart at a minimum) and limited local building
capacity
Queenstown faces a number of key challenges in terms of housing
and its housing market.
Arguably most importantly is the Quality of housing for amount
paid
And on top of this the Stock is rapidly ageing and is Poor
quality stock in what is a harsh environment
15Case Study: QueenstownQueenstown
Talk about pics16Case Study: QueenstownQueenstownKey challenges
in area:there is lots of poor quality housing in the area that
people shouldnt be living in and then another level of housing that
we cant attract people into, particularly professionals and
families (local informant, WCC, Tas).Difficult to attract
professional and key workerspopulation growth minimaldifficult to
fund local services and infrastructure + maintenance backlog
extensive and expensiveexodus of families and youth from area at
key transition pointsConsidered afford able by government therefore
no need for assistance
One of the best summations of the Key challenges for Queenstown
is given by a key local informant:
there is lots of poor quality housing in the area that people
shouldnt be living in and then another level of housing that we
cant attract people into, particularly professionals and families
(local informant, WCC, Tas).
Queenstown has serious difficulty attracting professionals and
key workers and one stakeholder noted that they face a challenge
breaking the thought in many professions that you move to
Queenstown because you have to do your time then you can move to a
better job in a better location.
Moreover, population growth is minimal,
difficult to fund local services and infrastructure with a low
rate base and limited ability to raise funds from small rate base
and maintenance backlog extensive and expensive
And, there is an Exodus of families and youth from area at key
transition points, such as Yr 10, 11 and 12 and university adds to
problem + limited services for aged
The Affordability of stock (ignoring quality of housing for $s
issue) is challenge, as the region considered affordable by
government and therefore not in need of affordable housing
assistance
Many key local informants noted the need for a demolition and
replacement grant for the region and the local council are hoping
that they can introduce a Royalties for the Regions scheme to fund
the ongoing needs of the community and improve town infrastructure
and services to attract workers.
17Case Study: QueenstownQueenstown and ZeehanTwo other important
issues raised in Zeehan and Queenstown:Tightening housing finance
conditionsCapacity to bid for assistance programsresource intensive
and time consuming
Two other important issues were raised in Zeehan and
Queenstown:
First, generally tightening housing finance conditions.
Stakeholders reported that it is simply difficult to get finance
in some areas of the WCC as banks are risk averse and the situation
with the housing market in Zeehan is thought to have contributed
significantly to this
Second, as noted earlier, the region has bid for affordable
housing assistance programs, but not been successful due to housing
being considered affordable.
Importantly, local stakeholders driving these applications for
funds note that they do not have capacity to continue to put
together such applications which are resource intensive and time
consuming for small communities and small entities
18Case Study: Port Lincoln, SAPort LincolnMajor regional centre
on west coast of SA650 kilometres from AdelaideGrowing population;
2009 ERP of 14,500 peopleRenown as Seafood Capital of Australia and
wealthy community
Ok, so moving onto a third typical type example from the
research: Port Lincoln
PL is Major regional centre on west coast of SAIt is 650
kilometres from AdelaideAnd has a Growing population; with an ERP
in 2009 of 14,500 peopleThe town is known as the Seafood Capital of
Australia and a wealthy community
19Case Study: Port Lincoln, SAPort LincolnHouse price movements
typical of trends in coastal SA and Australia generally and
continuing to escalateDriven by retirement migrationJobs growth
(although this has been variable over the last 10 years due to
changes in fishing quotas etc)Levels of housing stress in town
highChallenging general opinion that PL is a wealthy townReality:
significant proportion of population on low to moderate incomesCost
of building high due to topography (adding 30 per cent to building
costs) limiting supply of housingSome issues with flow of credit
for housing again highlighting risk aversion of banks
House price movements typical of trends in coastal SA and
Australia generally and continuing to escalate
These have been Driven by retirement migration
And Jobs growth (although this has been variable over the last
10 years due to changes in fishing quotas etc)
However, Levels of housing stress in the town are high
Challenging general opinion that PL is a wealthy town
Reality: significant proportion of population on low to moderate
incomes
And, local informants note significant pressure on social
services in the area because of the costs of housing and living and
there are rough sleepers in the town.
Moreover, the Cost of building in the town is high due to the
topography of PL with this adding 30 per cent to building costs
further limiting the supply of housing to the market.
Additionally, stakeholders reported some issues with flow of
credit for housing again highlighting the risk aversion of banks in
the post-GFC environment
20Case Study: Port Lincoln, SAKey concerns:Disappearance of
first homeowners since changes to FHOG+ sub-$250k properties
limitedlack of churn through marketPrivate rental market under
stressLimited public housing and needs refurbishment
Lack of affordable housing widely acknowledged as a brake on
economic developmentTown at limits Footprint geography limits areas
for development Need for higher density and infill development
The key concerns in terms of the PL housing market include:
The Disappearance of first homeowners since changes to FHOG
And sub-$250k properties very limited as are sub $100k blocks of
land and these are highly demanded, particularly by first
homeowners
The result of this is a lack of churn through market
The private rental market under stress low vacancy rates as not
seeing movement of FHOs into market because of affordability
issues
And, the town has limited public housing and much of the
remaining stock is in need of refurbishment
The lack of affordable housing in PL is widely acknowledged as a
brake on economic development
The town is also at its limits in terms of its footprint and the
geography of the town limits areas for development as the town is
bounded by coast and national park on two of its major fronts.
Higher density and infill needed to meet current and future
growth of the town and all indications are that the town will
continue to be a desired location for retirees from across the
region, as well as migrants.
21Transitions drivers of changeRecognition of housing
affordability crisis in rural and regional AustraliaGillard
government interest in regions including quarantining $200 million
from NRAS for rural and regional centresRecognition by state
governments of importance of regional communities and their housing
markets as shown in Victoriai.e. rural and regional regeneration
schemes for public housingSchemes for services in regionBUT: what
will be the future of country towns in other
jurisdictions?Long-term mining boom likely result in very different
geography of settlement and housing markets
SustainabilitySome housing markets are simply not sustainable -
socially, economically, ecologicallye.g. Lismore poor live in
Lismore and work at Coast, rich live at Coast and work in
Lismoree.g. Zeehan fortune of housing market tied to future and
productivity of minee.g. Meekatharra house prices fluctuate with
mining, $25,000 in 2000; $50,000 in 2005; $30,000 in 2010Private
rental sector non-existent in some county towns and dependant on
cars (e.g. Barossa Valley)Homeownership rates falling in some
centres affordability
ConclusionGovernments have taken housing in country towns for
grantedhas generated significant challenges for social, economic
and ecological sustainabilitySome evidence that governments are
paying more attention, BUT:still significant gaps in supply
processes including in planning + community resistance to
change
Governments have taken housing in country towns for grantedHas
generated significant challenges for social, economic and
ecological sustainability
Some evidence that governments are paying more attention,
BUT:
Still significant gaps in supply processes including in
planning, + community resistance to change
24ConclusionHousing needs to be recognised as issue of strategic
importance for country towns And, needs to be put at the forefront
of actions of RDA and other initiativesLocal government must
prioritise housing and planning for housing/land supply remains
part of their core businessneed to recognise impacts of climate
adaptation
Housing needs to be recognised as an issue of strategic
importance for regional and rural Australia and needs to be put at
the forefront of actions of Regional Development Australia and
other initiatives
Finally, Local government must prioritise housing, and planning
for housing and land supplySuch planning is part of their core
business
And, in doing this agencies need to recognise impacts of climate
adaptation
25Further InformationAndrew [email protected]
Selina [email protected]
Australian Housing and Urban Research Institute website
(positioning paper available now)Final report soon
For further information on the project, please contact
Andrew or Myself
Also, the first output of the research is available already on
the AHURI website and the final report will be added to the website
soon.
Thank you
26Table 1. Housing Stress by SLA, 2006 Census.
Proportion in housing stressNumber of SLAsExamples
0-9.9 per cent61Port Headland, Roxby Downs, King Island
10-19.9 per cent 334Wakool, Naracoorte and Lucindale, Bourke,
Katanning
more than 20 per cent 105Lismore, South Gippsland, Horsham,
Cowra
