By Sue Williams
House rents in regional NSW have soared sharply to record highs, just as those in Sydney show signs of a slowing rate of growth.
House rents in regional areas of the state jumped by a combined 4.5 per cent over the June quarter, while those in Sydney held steady, also at a record.
That leaves the median weekly house rent in NSW country and coastal areas at the highest it’s ever been, at $575 – only $175 less a week than Sydney’s median of $750, the latest Domain Rent Report for the June quarter shows.
“Regional rents have now shown four back-to-back quarters of growth and there’s been a re-acceleration of that growth over the last quarter to new record highs,” Domain chief of research and economics Dr Nicola Powell said. “That’s very different to the cities where house rents are stagnant or there’s been a slowing down of growth.
“It could be a result of higher demand as people continue to move to the regions, or of local economic drivers or tourism, or it could be a seasonal blip. But it certainly does make affordability a challenge, especially for the local population. And only time will tell if it’s an entrenched trend.”
Some regional areas have recorded remarkable growth in house rents over the past year, such as Uralla in the Northern Tablelands, 460 kilometres north of Sydney and 20 kilometres south-west of Armidale. Weekly rents there have shot up by 15 per cent to $460 a week compared with a year ago.
The old gold rush town had previously been best known for its local bushranger Captain Thunderbolt, but now its reputation is firmly 21st century as the $10.7 billion site of what will be Australia’s largest solar and battery farm. That’s offering 1250 construction jobs and 830 operational roles.
“That’s really sparked a real estate boom here,” said Bella Johnson of Laing & Simmons Armidale. “The solar farm is attracting a lot of workers and they all want to live here too, with that demand driving up both rents and prices.
“I think they’re also discovering that it’s a really nice up-and-coming town and it might well be, when construction is finished, that some of those workers decide to stay.”
KPMG economist Terry Rawnsley says that, as well as those major one-off projects spurring rental growth, there’s still the movement of city people to the regions boosting demand for a limited number of properties.
“We’ve seen, over the last 18 months, some of the regional centres gain a real economic vibrancy post-COVID,” he said. “Younger people moving there and the growth of remote working have provided a real shot in the arm of those towns, and they, in turn, seem to have more of an emphasis on place-making.
“As capital cities become more expensive, then those more affordable regional markets look more attractive. Those newcomers often prefer, and can afford, to rent the higher quality homes, too, which drives up the median.”
Other regional areas with large annual rent gains included Muswellbrook in the Upper Hunter, 120 kilometres north-west of Newcastle, where house rents rose by 13.3 per cent to $510, and the Murray River region, near Mount Kosciuszko in south-eastern NSW, up 11.8 per cent to $520.
Of Muswellbrook, Warburton Estate Agents’ Anna Martaki said the demand was mostly a result of people moving from Sydney for affordability reasons. “We had a lot of people come during COVID, and they’re still coming,” she said. “It’s a very pleasant place with a sense of community.”
It’s a similar story for the Murray River. “A lot of people moved here from the capital cities’ metro areas, which was initially COVID-driven, but has continued ever since,” PRD Albury-Wodonga director Matt Sharp said.
“We have a low supply of stock too, which has been driving up rents and prices. It’s a very popular tree-change place with a couple of universities, fantastic hospital facilities, a cancer centre and the railway and Hume Highway.”
The regions, as a whole, are growing, with the Australian Bureau of Statistics estimating the population of regional Australia at 9.78 million in June 2023 – up 6 per cent since 2018.
“Regional Australia now makes up nearly 40 per cent of the nation’s population,” Regional Australia Institute acting chief executive Amanda Barwick said.
“The number of city-dwellers choosing a life in the regions hit a 12-month high in the March quarter Regional Movers Index, now sitting at 20 per cent above the pre-COVID average.
“As a country, we haven’t prepared for this influx of people – which is why we are now seeing issues regarding housing ... Our target on housing aims to see regional rental vacancy rates increase to above 3 per cent, and to ensure annual building approvals keep pace with population growth.”