Australia’s regional communities hold more appeal than ever for Aussies in search of a comfortable lifestyle. But when it comes to looking for housing, there's a type of home that people want, but the regions often lack.
Housing supply in most communities across both regional and metropolitan Australia is in short supply – something that anyone searching to buy or rent knows well.
When it comes to housing in regional communities, residents or new movers looking for homes will find not only that the available homes limited, but that they are often all of one sort: detached homes with three or more bedrooms.
It’s understandable that in communities with fewer constraints on land supply, that space has been taken advantage of and detached homes have been the focus of building.
But it also means that for some considering living in the regions, it can feel like the homes aren’t built for them.
Data from the 2021 census and the Regional Australia Institute shows that communities in regional Australia are much less likely to have one- and two-bedroom properties available, compared to in metropolitan areas.
In terms of overall proportion of housing stock, only 11% of homes in regional areas were either studios or one-bedrooms, compared to 15% in the cities.
That gap widens for two-bedroom homes, with 28% of the housing stock in the regions but 34% in metropolitan areas.
When it comes to three or more bedrooms, the trend flips. In regional Australia, 61% of homes contain three or more bedrooms, while that’s just 51% of the stock in metro areas.
The disparity is housing diversity is particularly pronounced when it comes to the rental market.
Across capital cities, nearly half the rental stock is made up of one- and two-bedroom homes. In regions, one- and two-bedroom homes account for less than 40%.
What this also indicates is that houses are the dominant type of home in regions.
Beyond the fact that some residents might not need a home of three-bedrooms or above, there’s also the fact that regardless of bedroom size, there are material reasons why some might prefer to live in a townhome or unit complex – which will typically be those smaller-sized homes – and not in a detached house.
The Regional Australia Institute pointed to young professionals, key workers on major regional construction projects, and older people as cohorts that might prioritise smaller properties as well as lower-maintenance homes.
Those looking for apartments or townhomes in many of the regions, however, will find far fewer properties to choose from. Across regional Australia, 81% of the housing stock is detached housing.
What is also evident is that despite the desire for smaller homes in regional areas, current building trends show that if change is coming, it’s happening only slowly.
Analysis of Australian Bureau of Statistics’ approvals data and the latest census by the Regional Australia Institute indicated that detached housing approvals in 2024 accounted for only a marginally smaller share of all homes coming through the pipeline than what has been the case over the long term.
Across regional Australia, 72% of the dwellings approved in the 2024 calendar year were for detached houses, compared to the long-running average of 77%.
Notable exceptions include regional cities like Newcastle and the Gold Coast, where non-detached housing is the majority form of new homes being approved.
But why are more multi-dwelling builds not coming to the regions beyond these hotspots? If demand is there, why not build?
The Regional Australia Institute points to a number of systemic barriers that – as they hear from communities and private entities alike – are hampering multi-dwelling developments.
One is that the enabling infrastructure needed to get these projects on the ground often has a prohibitively high per-dwelling costs. This contributes to making the cost of building unviable.
Higher construction costs and longer build times driven by skills and materials shortages are also impacting the bottom line for builders, pushing multi-dwelling projects into the territory of financially unviable, whereas land estates have different realities in terms of sales and cash flow.
Are you interested in learning more about Australia's new homes? Check out our dedicated section.
