While people are flocking to regions, others aren't leaving

Representatives from CoreLogic, the building industry and local council joined Regional Australia Institute's 'Regions Rising Webinar' which looked at how regions can navigate population growth.

The webinar was sponsored by NBN Co and Nutrien Ag Solutions and conducted by the Regional Australia Institute, the thinktank organising the federal government's $4.6 million push to get more people to the regions.

At the webinar, Eliza Owen Head of Research at CoreLogic Australia said historically, in any given year, arrivals and departures from the regions tend to trend together.

But that didn't happen through 2020 as "people were more inclined to stay put" said Mrs Owen.

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She said it was the departures from regional Australia falling by 5 per cent below the series average, and "a bit of an uplift" in people coming from the capitals which caused a record high annual net gain of 43,000 additional people winding up in markets outside of capital cities.

She said remote work was exacerbating the affordability crisis partly because remote workers who had come from cities were predominately from the knowledge economy and tended to have higher incomes.

"So when they see they're getting more bang for their buck in a popular regional area, they could create more displacement to locals," she said.

Regional housing jumped into the news headlines late last year with regional house price growth going well above that of metro areas as regional economies bounced back earlier and further than the metro economies from the COVID-19 recession. At the same time, rental stock in the regions shrank by about 50 per cent, according to CoreLogic.

The South Coast property market (defined by CoreLogic as south of Shoalhaven) ranked 5th in CoreLogic's top 50 regional growth markets in the 12 months to April 2021, with an annual growth rate of 22.5 per cent.

Richmond Valley and Noosa Hinterland topped the list with the Shoalhaven coming in at number 12 and the Southern Highlands at number 14.

Sales activity was concentrated in economic centres and regions adjacent to capital cities with the volume of sales within the Shoalhaven rocketing by 28.6 per cent with over 3000 properties sold in the 12 months to February 2021. That's about 600 more than the prior 12 months.

The South Coast region had property sales grow by 26.5 per cent or about 500 more than the prior 12 months while Wollongong grew by 18 per cent, or about 400 more.

Tim Renwick, Co-owner Independent Builders Network, a co-op of regional builders, said a "tsunami" of factors was making it difficult for the building industry to keep up with demand.

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He said the regional building industry went from work drying up in 2019 after the banking royal commission caused a tightening of project financing, to the industry struggling to keep up with demand brought on by the federal government's HomeBuilder initiative.

At the peak of COVID, timber imports halted, wiping out 22 per cent of the timber market. The bushfires also affected timber supply.

Imports had started back up in Australia but were experiencing massive delays with most Scandinavian timber going to the stronger United State's market, he said.

With Texas freezing over in February, adhesives froze with it, causing holdups in the Australian building industry.

Timber mills were working overtime and many workers were overworked and experiencing mental health difficulties as a result, he said.

Mr Renwick encouraged builders to utilise non-standard building materials and techniques to work around timber shortages.

A shortage of labour was also affecting building industry productivity, according to Mr Renwick. He urged the government to kick start international skilled migration.

And he wanted the state government to design an incentive policy through stamp duty discounts targeted at speculative development in less popular regional areas.