While the Illawarra's economic recovery from the COVID-19 pandemic appears to be going better than most, the region's housing "affordability problem" is becoming more acute, an expert says.
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New research, Pathways to regional housing recovery from COVID-19, has examined the consequences of COVID-19 for households in regional Australia.
Regional housing markets which increased in value more than capital cities during 2020 will have different recovery needs in the wake of the pandemic, the Australian Housing and Urban Research Institute research has indicated.
According to the research, the Australian combined five capital cities' dwelling prices index decreased by 1.45 per cent, while the 'combined rest of state regions' increased by 3.77 per cent by the end of November 2020.
Alex Frino, Professor of Economics at the University of Wollongong said the overall findings in the report were reflected in the economic evidence available for the Illawarra.
"When you look at regional recovery - in unemployment, in building approvals data and in real estate prices - very strong and robust numbers are starting to come through in relation to last year," he said.
"For example, for the Illawarra, real estate prices increased by an average of 10 per cent for 2020, whereas in Sydney the increase was a little shy of three per cent.
"For the first three months of this year, real estate prices both in Sydney and the Illawarra increased by about six per cent.
"The real estate price affordability problem in the Illawarra is clearly becoming more acute."
Prof Frino told the Mercury unemployment numbers had been plummeting for the Illawarra - much more so than in broader NSW.
"Unemployment numbers for the Illawarra, in June last year they were about 7.5 per cent, but in the first two months of this year, they have fallen to five per cent - that's better than the figure for the whole of NSW," he said.
"On the building approvals front, we're up five per cent on last year, which is also indicative of a rapid recovery.
"Based on the numbers that we're seeing for the Illawarra, and the trajectory for unemployment, building approvals and real estate prices, I think our recovery will be much more rapid than anticipated, and more rapid than broader NSW and Australia."
According to the report, another important impact on regional housing during the pandemic has been that JobKeeper and the coronavirus supplement for income support recipients have buffered the effects of job and income losses.
The report indicates the winding back of these government economic supports will expose people to housing risk.
"Our research identifies that a regional model for recovery requires specific attention to place," lead author of the report, Dr Julia Verdouw from the University of Tasmania said.
"COVID-19 has exposed housing policy risks that must be addressed in their regional context."
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