Regional Australia is experiencing a housing squeeze. Despite thousands of Australians moving to the regions every year, new housing approvals have been falling for decades.

According to the Regional Australia Institute (RAI), approvals between 2000 and 2025 have dropped 21%. In the past year, fewer than 48,000 new homes were approved in regional areas—compared with 60,000 in 2000.

This mismatch between demand and supply is stark. Around 115,000 people relocate to regional Australia each year, putting immense pressure on existing housing stock. Vacancy rates are already tight at 1.7%, and rents have risen 6.2% in 2024, outpacing capital cities.

The RAI recommends alternative building methods such as prefabricated housing, but challenges remain: high costs, worker shortages, and limited scale.

RAI CEO Liz Ritchie sums it up: “The lack of housing is impacting the regions socially and economically, affecting regional Australia’s ability to grow prosperously and sustainably.”

For buyers and investors, the message is clear: the supply crunch is creating high demand for existing homes, driving up both prices and rents.