The estimated usual resident population of the NSW Northern Rivers region at the 2021 census was 311,177 men, women and children and the largest age cohort appears to be people aged between 55-69 years of age.
These regional residents are living in est.143,846 freestanding houses, semi-detached town houses, units, flats, cabins and caravans.
From I July 2021 to January 2023 there have been a total of 2,137 new building approvals granted across the region. This represents a fall of -31 housing approvals compared to those granted from 1 July 2020 to 30 June 21. Most of these approvals appear to have been for free standing houses.
As of 4 April 2023 there are est. 700 properties on the regional rental market, with approximately half priced between $800 to $3,500 a week. In 2021 in Northern Rivers Region an estimated half of all households had incomes below $2,000 per week and only 13.1% of all households earned an income of $3,000 or more per week.
“Housing
markets are now at an inflection point. At a time of returning
migration, they are contending with a perfect storm of high inflation
and interest rates, slowing supply and record low vacancy rates.”
[State
of the Nation’s Housing Report 2022–23,
3 April 2023]
Australian
Government, National
Housing Finance and Investment Corporation (NHFIC),
3
April 2023:
State
of the Nation’s Housing Report 2022–23
Australia’s
housing markets have been through an extraordinary period, impacted
by COVID-19 related lockdowns, low population growth and record
amounts of monetary and fiscal stimulus.
NHFIC
modelling in the State of the Nation’s Housing 2022-23 suggests:
More
than 1.8 million new households are expected to form across
Australia from 2023 to 2033, taking total households to 12.6 million
(up from 10.7 million in 2022). These households are expected to
comprise around 1.7 million new occupied households and 116,000
vacant properties (e.g. holiday homes).
The
much earlier increase in interest rates (relative to previous
Reserve Bank of Australia guidance) is adversely impacting supply.
NHFIC expects around 148,500 new dwellings (net of demolitions) to
be delivered in 2022-23, before net new construction falls to
127,500 in 2024-25. A recovery in supply is expected after 2025-26
on the back of changing macroeconomic conditions and stronger
underlying demand.
Slowing
supply, together with increasing household formation is expected to
lead to a supply household formation balance of around -106,300
dwellings (cumulative) over the 5 years to 2027 (and around -79,300
dwellings over the projection period 2023 to 2033).
From
2023 to 2032, household formation is expected to be dominated by
lone person households (563,600 additional households), followed by
couples with children households (533,300 additional households).
Within 5 years, it is expected lone person households will be the
fastest growing household type across the country.
NHFIC
continues to expect a shortage of apartments and multi-density
dwellings for rent over the medium-term. Net additions of apartments
and medium-density dwellings such as town houses are projected to be
around 57,000 a year (on average) over the 5 years to 2026-27,
around 40% less than the levels seen in the late 2010s.
The
premium for space at home, with ongoing work from home arrangements
following the pandemic has contributed to reducing average household
size. This has been a factor in sharply falling vacancy rates.
Analysis shows that decreasing household size since mid-2021 led to
an additional 341,500 households forming, or around 103,000 in net
terms since the beginning of COVID-19.
NHFIC
estimates that, conservatively, around 377,600 households are in
housing need, comprising 331,000 households in rental stress and
46,500 households experiencing homelessness. Housing need across the
country range from 208,200 households in highly acute rental stress
to 577,400 households under less acute rental pressure.
Key
findings:
Strong
demand for housing coupled with tight supply of both labour and
materials, and bad weather has put significant pressure on the
construction industry. Approximately 28,000 dwellings were delayed
in 2022. NHFIC’s industry consultation suggests builders are
making cost allowances of up to 40% for unexpected delays, up from a
more normal 20%.
In
addition to higher interest rates, supply of new housing continues
to be impeded by a range of factors including, the availability of
serviced land, higher construction costs, ongoing community
opposition to development and long lead times for delivering new
supply.
Rental
growth and rental affordability varied significantly across and
within greater city and regional areas, with rental growth in
regional areas now falling after a period of record demand. Rental
growth in major cities such as Sydney and Melbourne are outpacing
rental growth in regional NSW and Vic, which suggests the premium of
living in large cities close to employment centres may be returning.
Rental
affordability has varied greatly across the country during COVID-19.
In Sydney, rents in several outer Local Government Areas (LGAs)
increased more than 30% from early-2020 to January 2023 and more
than 3 times that of some inner-city LGAs. Outcomes in Melbourne
have been more subdued, with more than half of Melbourne’s LGAs
experiencing rental increases of less than 10% since pre-pandemic.
Southeast Qld has had the largest rental rises, with all 12 LGAs
experiencing rental increases of 30% or more.
Trends
in the macroeconomy can affect the ability of first home buyers to
enter the market. Analysis shows that since the 1990s in Sydney,
deposit hurdle rates (i.e. deposit as a percentage of income) on
average increased by around 8% during an interest rate tightening
cycle (-10% so far this cycle), compared with 26% during easing
cycles. The average deposit required as a percentage of annual
income has nearly doubled over this period from 60% to 110%.
Download
the report
State
of the Nation's Housing Report 2022-23 (pdf 3.75 MB)
https://www.nhfic.gov.au/sites/default/files/2023-03/state_of_the_nations_housing_report_2022-23.pdf
“In
the detached market, in the 12 months to January 2023, average
capital city price growth dropped to -4% after peaking
at 23% in the last quarter of 2021.
Sydney
and Melbourne were most impacted, with house prices
falling around 15% and 11% respectively over the12
months to January 2023. House price growth was still relatively
strong in Adelaide (6%) followed by Darwin (5%) and
Perth (3%).
Detached
house price growth in regional NSW, Vic, Qld, SA, WA
and Tas outpaced growth in capital city areas of these states.
The strongest regional price increase was in regional SA”
[State of the Nation’s Housing Report 2022–23, 3 April 2023]
According to the Reserve Bank of Australia, 16 March 2023:
The
share of households that rent has risen over the past few decades,
mainly in the eastern states. This reflects a rise in the proportion
of private renters as home ownership rates have declined. The share
of households in public housing has also declined, as growth in
public housing stock has not kept pace with growth in the total
number of households. Rent assistance to private tenants has also
become a more common way of providing housing assistance to lower
income households……
The
average and median incomes of renter households are generally lower
than owner-occupiers across age groups.... However, the share of
private renters who are in the top half of the income distribution
has risen over time as the share of private renters in higher paid
jobs, such as professional services, has increased. This shift has
coincided with an increase in the average age of first home buyers
and a decline in the home ownership rate among younger households…..
Renters,
especially those on lower incomes, tend to spend a larger proportion
of their incomes on basic living expenses and have less spare cash
flow (i.e. income available to spend on discretionary consumption or
save), relative to those who have a mortgage. Renters also tend to
have lower savings buffers. In combination, these factors can make
renters more vulnerable to increases in the cost of living and make
it more difficult for these households to accumulate wealth over
time, compared with owner-occupiers….
Nearly
90 per cent of all households in the lowest wealth quintile were
renters in 2019/20. This in part reflects that renters tend to be
younger than other types of households and so have had less
opportunity to accumulate savings over time. However, renters also
tend to have lower wealth compared with owner-occupier households
even after controlling for age and income....
The Australian Bureau of Statistics Monthly Consumer Price Index (CPI) showed that Rent CPI stood at 1.0% in April 2022 and had risen to 1.6% by May - then risen again in July to 2.0%, August 2.4%, September 2.9% & December 4.1%.
The start of a new year saw the Rent CPI at 4.8% in January & February 2023. The next release of monthly CPI data occurs on 26 April 2023.
