Transcript Forgotten but not Gone: The Housing Markets of Australia’s

Forgotten but not Gone: The Housing
Markets of Australia’s Country Towns
Presentation to
The Sustainability of Australia’s Country Towns Conference
La Trobe University
October 1 2010
Professor Andrew Beer and Dr Selina Tually
Housing, Urban and Regional Environments Research Group
School of Social Sciences
University of Adelaide
Introduction
• Project for AHURI: Drivers of supply and demand in Australia’s
rural and regional housing markets
– team from Flinders University (now Adelaide University), Curtin, RMIT
– 15 case studies of housing markets (all States and NT)
– focus: impact of current suite of housing affordability programs
• Paper focuses on three case studies somewhat typical of
country towns in Australia
– Major themes of:
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Housing affordability and housing stress
Inadequate housing supply processes
Quality of housing
Relationship between housing markets, labour markets
and economic development
Introduction
• 40 per cent of Australia’s population lives in rural and regional
Australia
– only 4 per cent of households resident on farms
• Significant diversity in settlement types
– some towns growing strongly
– some stagnant
– some in undeniable decline
• Significant debate around future of towns – particularly over
last decade, due to:
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economic and demographic change, including exodus of youth
industry restructuring and variable economic development outcomes
rationalisation of government services
seachange and treechange movements
Mining
impact of anthropogenic climate change
Housing affordability and
housing stress
• On average housing stress around 8 per cent for
purchasers and 20 per cent for renters
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Roughly equal to metropolitan rates
Lower house prices offset by lower average incomes
Very acute in some locations e.g. mining towns and resort towns
Some places in excess of 50 percent in private rental sector
• Housing stress discourages economic growth as labour
cant move to region
Housing affordability and
housing stress
Table 1. Housing Stress by SLA, 2006 Census.
Proportion in
housing stress
0-9.9 per cent
10-19.9 per cent
more than 20 per cent
Number
of SLAs
61
334
105
Examples
Port Headland, Roxby Downs, King Island
Wakool, Naracoorte and Lucindale, Bourke, Katanning
Lismore, South Gippsland, Horsham, Cowra
Source: ABS Census 2006
Inadequate Supply
• Small scale building industry with labour force shortages
• Inadequate zoning of land in many places
• Reluctance to consider denser housing forms or
alternative housing
– community perceptions and resistance to affordable housing
• Limited investment in private rental housing
• Failure of central government processes
– with exception of FHOG
– limited impact of current suite of government housing programs
– sell off of government owned housing
Quality of Housing
• Some centres affected by overcrowding and low housing
standards
– possible impact on heath?
• Reflects history of under investment in housing stock in
past in some markets
– + high cost of housing construction
• Impact of access to services
• Estates of older run down public housing
Relationship between housing
and economy
• Housing markets and labour markets inextricably linked
• Post-productivist landscapes
– generate new relationships between housing and the economy
as housing per se becomes the market for goods and services
• eg Apollo Bay
• Lack of affordable housing a brake on economic
development in many towns
• Mining industry has generated a whole new dynamic
– much greater volatility
• Failures of labour markets in some communities
reflected in housing standards
– including Indigenous communities
Case Study: Lismore, NSW
• Population 20,000
• Traditional regional centre, now with University.
• Unafforable housing, because:
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regional affects with seachange migration
impact of student population
low incomes in region
Indigenous population, suffers discrimination
limited supply of land for development
limited take-up of new government initiatives including NRAS
Case Study: Zeehan and
Queenstown, Tas
• Two townships on remote West Coast of Tasmania
– Zeehan population: 850
– Queenstown population: 2,100
• Both predominately mining communities
Case Study: Zeehan
Zeehan
• Interesting case study in house price movements, due to:
– “Honour” of numerous exposés on town – was cheapest place
in Australia for housing!
• significant investor interest; anticipation of mining boom
– Recent short-lived mining revival
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Avebury nickel mine
commissioned June 2008
care and maintenance in December 2008
GFC hit hard
– Mine opening and closure: sharp and immediate effect on
house prices
Case Study: Zeehan
Zeehan
• Movements 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 turnover
– Investor defaults
– Depressed market – business closures
– Waiting game for mine opening; some whispers but nothing
confirmed
• Current situation: declining town, poorly maintained
stock, lack of services and funding for services and local
infrastructure
Case Study: Zeehan
Zeehan
Case Study: Queenstown
Queenstown
• Community with long-standing history of mining.
• Some of workforce lives locally, some mine workers drivein/drive-out
– Generally male workers whose families live in more desirable
and well serviced locations on the north west coast
• Housing cheap by Tasmanian and Australian standards –many
properties sub $150k
– Strong house price growth across region 2003-2008 in
particular; tailing off post-GFC and with volatility in labour
market and commodity markets
– Growth again from low base
Case Study: Queenstown
Queenstown
• Key challenges in area:
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Quality of housing for $s
Stock rapidly ageing
Poor quality of stock concerning in what is a harsh environment
Costly to build in region (30% more than Hobart at a minimum)
and limited local building capacity
Case Study: Queenstown
Queenstown
Case Study: Queenstown
Queenstown
• Key challenges in area:
– ‘there is lots of poor quality housing in the area that people
shouldn’t 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 workers
• population growth minimal
• difficult to fund local services and infrastructure + maintenance backlog
extensive and expensive
• exodus of families and youth from area at key transition points
– Considered afford able by government
therefore no need for assistance
Case Study: Queenstown
Queenstown and Zeehan
• Two other important issues raised in Zeehan and
Queenstown:
– Tightening housing finance conditions
– Capacity to bid for assistance programs
• resource intensive and time consuming
Case Study: Port Lincoln, SA
Port Lincoln
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Major regional centre on west coast of SA
650 kilometres from Adelaide
Growing population; 2009 ERP of 14,500 people
Renown as Seafood Capital of Australia and wealthy community
Case Study: Port Lincoln, SA
Port Lincoln
• House price movements typical of trends in coastal SA
and Australia generally and continuing to escalate
– Driven by retirement migration
– Jobs growth (although this has been variable over the last 10
years – due to changes in fishing quotas etc)
– Levels of housing stress in town high
• Challenging general opinion that PL is a wealthy town
• Reality: significant proportion of population on low to moderate incomes
– Cost of building high due to topography (adding 30 per cent to
building costs) – limiting supply of housing
– Some issues with flow of credit for housing – again highlighting
risk aversion of banks
Case Study: Port Lincoln, SA
Key concerns:
– Disappearance of first homeowners since changes to FHOG
• + sub-$250k properties limited
• lack of churn through market
– Private rental market under stress
– Limited public housing and needs refurbishment
– Lack of affordable housing widely acknowledged as a brake on
economic development
– Town at limits
• Footprint – geography limits areas for development
– Need for higher density and infill development
Transitions – drivers of change
• Recognition of housing affordability crisis in rural and regional
Australia
– Gillard government interest in regions
– including quarantining $200 million from NRAS for rural and regional
centres
• Recognition by state governments of importance of regional
communities and their housing markets as shown in Victoria
– i.e. rural and regional regeneration schemes for public housing
– Schemes for services in region
– BUT: 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
Sustainability
• Some housing markets are simply not sustainable socially, economically, ecologically
– e.g. Lismore – poor live in Lismore and work at Coast, rich live at
Coast and work in Lismore
– e.g. Zeehan – fortune of housing market tied to future and
productivity of mine
– e.g. Meekatharra – house prices fluctuate with mining, $25,000
in 2000; $50,000 in 2005; $30,000 in 2010
– Private rental sector non-existent in some county towns and
dependant on cars (e.g. Barossa Valley)
– Homeownership rates falling in some centres – affordability
Conclusion
• Governments have taken housing in country towns for
granted
– has 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
Conclusion
• Housing 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 initiatives
• Local government must prioritise housing and planning
for housing/land supply remains part of their core
business
– need to recognise impacts of climate adaptation
Further Information
Andrew Beer
[email protected]
Selina Tually
[email protected]
Australian Housing and Urban Research Institute website
(positioning paper available now)
Final report soon