HIA warns regions bearing brunt of housing strain

“A one‑size‑fits‑all approach to housing policy is failing the regions,” Croft said.

Croft singled out the NSW electorate of Farrer as emblematic of the pressures confronting many fast‑growing regional areas and said the strong population gains there were running headlong into entrenched housing shortages.

“Nowhere is this more evident than in regional electorates such as Farrer, which has experienced strong population growth but continues to face chronic housing shortages, rising rents and limited housing choice for workers, families and young Australians,” he said.

The HIA said that regional communities had played a pivotal role in absorbing post‑pandemic migration away from capitals but had not received a commensurate uplift in housing investment.

“Regional communities are doing the heavy lifting when it comes to population growth, yet housing policy remains overwhelmingly metropolitan‑focused,” Croft said.

Call for a region‑first national plan

Against this backdrop, the HIA is pushing for a regional housing framework rather than incremental tweaks to existing policy settings.

“Housing must be treated as critical economic and social infrastructure, especially in regions expected to absorb future population and workforce growth,” he said.

The proposed national plan would include “place‑based housing targets” and dedicated funding streams for regional Australia, with a stronger emphasis on unlocking new supply in regional growth corridors.

The HIA also said it wanted targeted measures to close gaps in social, affordable, and key‑worker housing and for housing investment to be aligned with transport, health, education, and broader workforce planning.

Croft warned that without a shift in policy settings, high‑growth regions faced a future where population growth increasingly eroded liveability.

“Without decisive action, regions like Farrer risk a future where population growth outpaces liveability – undermining the very communities Australians are choosing to move to,” he said.

“If governments want people to live and work in the regions, they must match that ambition with a housing system designed for regional realities.”

Tight vacancies, rising prices

Behind the HIA’s warning is a combination of low vacancy rates, fast‑rising rents, and constrained new construction in many regional centres and smaller towns.

Croft said essential workers were increasingly unable to find somewhere to live close to their jobs, while younger residents were being priced out of their hometowns.

“Essential workers are struggling to find rental accommodation, young people are being priced out of their home communities, and local businesses are unable to attract staff because workers simply cannot find a place to live,” he said.

The association highlighted that vacancy rates in many regional markets sat near or below 1 per cent, leaving very little spare capacity.

It further stated that higher construction costs, worker shortages, and complex planning arrangements were limiting the pipeline of new homes, while the stock that was being delivered did not include enough social, affordable, or key‑worker housing.

Recent price indices back up the HIA’s on‑the‑ground anecdotes, with PropTrack’s Home Price Index for March 2026 showing regional values rising 0.4 per cent over the month compared with 0.3 per cent in the capitals, with regional prices up 11 per cent over the year.

Meanwhile, Cotality’s latest Home Value Index revealed that values outside the capitals climbed 1.1 per cent through March and 3.3 per cent over the quarter, indicating that broad swathes of regional Australia were posting stronger growth than the major cities.

[Related: Regional markets seize growth lead from capital cities]