Issues, Opportunities and Constraints in Responding to Housing Need in Regional Victoria

Many regional cities and townships across Victoria have been experiencing sustained population growth over many years as they shifted from traditional agriculture-based economies to new employment opportunities in the service and education sectors.

Then came COVID and an exodus of thousands from the city to the country, which ‘soaked up all the spare housing’, according to KMPG regional economist Terry Rawnsley. ¹

Although the flow of Melburnians to the regions has slowed from the heights reached during the pandemic, there are no signs that rents that were pushed higher in 2021–2022 will fall.

According to Domain’s March Rent Report, ² across regional Victoria median house rents jumped by six per cent over the past year, or by $25 to $445 per week.

That is down from the rise of 9.1 per cent over the year to March 2022 but, despite this, house rents were still up by double digits in eight regional Victorian municipalities.

That includes flood-affected Greater Shepparton, where rents are up 13.5 per cent since March last year to a weekly median rent of $420, and where 63 per cent of renting households are in the lowest income group, compared with the Victorian average of 25 per cent and the Melbourne average of 17.5 per cent. At the same time, vacancy rates in Shepparton for the first half of 2022 were 0.5 per cent, well below the accepted ‘healthy market’ vacancy rate of three per cent.³ In Wodonga, rents were up 7.5 per cent on the previous year to a weekly median of $430 with a vacancy rate of 0.77 per cent.

Mitchell Shire, just 40 kilometres north of Melbourne, has become one of Victoria’s fastest-growing outer metropolitan municipalities, where community services and infrastructure are struggling to keep pace with population growth and housing development.

Then there are tourist and tree-change destinations, like the Alpine and Strathbogie Shires, which have experienced high housing demand, often at the expense of low-income households who have been increasingly priced out of the private rental market.

Regional centres have significant challenges with a very limited pool of rental homes overall and of affordable rental homes and it is people on very low incomes that are most affected amid the growing cost of living pressures.

But even people in well-paying jobs are not immune to the rental crisis as they too often cannot find suitable accommodation where they work regionally.

A recent Community Housing Industry Association Victoria (CHIA Vic) report revealed that 35,900 households across regional Victoria were experiencing homelessness or living in overcrowded properties, with 5-7 per cent of the population requiring some form of support to sustain their tenancies.⁴

Unlike most metropolitan areas, housing in regional Victoria is predominantly comprised of three-to four-bedroom detached houses despite a growing demand for smaller properties. According to the 2021 Census, one- and two-person households comprise 65.7 per cent of the population in regional Victoria,3 yet only 18.3 per cent of the housing stock is one or two bedrooms.⁵

While the lack of supply and diversity of affordable rental housing stock is common across regional Victoria, not all regions are the same.

The demographic profile of each region varies significantly across the state in terms of age, gender, ethnicity, employment, education, health, and household size.

This is a fact not lost on BeyondHousing, the main entry point for the homelessness system across 13 Local Government Areas and the largest community housing organisation operating within the Goulburn and Ovens Murray regions of Victoria, where it supports more than 6,400 at-risk people and families each year and manages more than 700 tenancies, 15 per cent of which are occupied by Aboriginal and Torres Strait Islander people.

The demographic diversity of regional Victoria is most stark in Greater Shepparton, which has the highest proportion of Aboriginal and Torres Strait Islander people, at 3.9 per cent of its total population of 68,000.

Furthermore, nearly 12,000 Shepparton residents were born overseas, 26 per cent of whom arrived in Australia between 2016 and 2021. This is a migration rate of 25.7 per cent compared with 16.6 per cent for the rest of regional Victoria. The municipality also has a higher proportion of single-parent families (11.1 per cent).⁶

The January 2023 Victorian Housing Register shows there are currently 2,590 people on the Victorian Housing Register social housing waitlist in Shepparton, of which 1,423 are considered priority access.

In Wangaratta, homelessness numbers have skyrocketed by 66.67 per cent between 2016 and 2021, according to the latest Census data, with an estimated 125 people either sleeping rough, in tents, or couch surfing.

Unsurprisingly, the number of people registered on the waitlist for Wangaratta and the neighbouring centre Benalla has doubled over the past 12 months to 1,607.

There have also been significant increases in the number of people registering for social housing in Wodonga (1,387) and Seymour (597), according to the January 2023 figures.

The high demand for more social housing, limited affordable rental options in the private market, and record low vacancy rates exacerbate the issue across regional Victoria.

But even the Victoria Housing Register figures fail to reflect the true extent of demand for housing across regional Victoria. If there is no social housing in a community, people cannot register.