The Labor government has committed to ensuring regional Australia gets a fair go; John Edwards of Residex believes it is the start of a serious policy desire for an ex-urban generation in Australia. “I have for a long time suggested that the only way to solve the un-affordability crisis in our Australian capital cities is to create growth in our regional areas; in turn encouraging a good percentage of our city dwellers to relocate to a better lifestyle. This process will by its very nature reduce the capital growth rate in our most unaffordable capital cities but will in the long term be beneficial for society and ensure there is no housing bust that is so often suggested. It will cause a better balance between capital growth and rental returns in the future.
This is because cities will have tighter rental markets with higher rental costs as a result of lower investor activity due to dwelling costs and expected lower capital growth.”
The Gillard Government plans to spend $200m to help build up to 15,000 more affordable homes in regional cities over three years and “relieve pressure on our major capital cities, so that Australia can grow sustainably.” Edwards points out that just the development of 15,000 new homes in regional Australia suggests a capital outlay in this area of the economy of something in the order of $3.7bn. “Now couple this expenditure with the other initiatives the government is committed to and the national Broadband rollout and we have significant capital being injected into our regional cities. This in itself is going to drive these economies but together with the recent breaking of the drought and we have a regional Australia that I think may well boom. Our PM is probably on a winner!”
At the moment, regional markets are still relatively soft but the increasing strength of the major metropolitan markets should spill over in 2011, says McGrath. “Most regional centres have not yet fully recovered from the GFC and therefore great value is still available. We’re already seeing new interest in holiday homes and weekenders plus rising demand from executive families looking for a lifestyle change in areas with a fast CBD commute.” McGrath says a growing number of white-collar buyers from Sydney are moving to lifestyle markets offering a fast commute such as the Central Coast, the Blue Mountains, Southern Highlands and Wollongong
“These buyers are several years away from retirement but are taking advantage of technologies allowing them to work from home two to three days per week,” he says.
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