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This study addresses the question posed in the 2009 AHURI Research Agenda: how do the drivers of supply and demand for housing in regional and rural centres affect the supply of affordable housing?

This is a particularly important area of investigation at the current time, as there is a dearth of literature and data analysis tracing changes in, and the challenges facing, Australia’s regional housing markets. Throughout this report, the focus of analysis is directed to centres that are not part of the functional labour markets of the capital cities (Baum & Mitchell 2010) and this is consistent with earlier research on rural and regional housing markets (see, for example, Rowley & Haslam McKenzie 2009; Rowley 2008; Wulff et al. 2007; Hillier et al. 2002; Beer, Bolam & Maude 1994). In practical terms, this rules out a limited number of substantial communities—including Geelong, Newcastle, Wollongong and the Gold Coast.

It is also important to acknowledge that regional housing markets have been affected by the same house price boom and subsequent affordability pressures that have influenced urban housing markets in addition to other contextual conditions that influence local housing markets. The fact is that, to date, analysis of Australia’s housing markets has largely focused on metropolitan (capital city) markets, to the detriment of understanding the impact of affordability and housing supply and demand in regional markets, as well as consideration of the impact of new housing policy programs and mechanisms on conditions in these markets.

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