Aussie regional hotspots test housing supply as populations surge

Australian mortgage brokers with clients eyeing regional markets face another year of solid population growth outside the capitals, with ABS data showing regional Australia’s population rose 1.1% in 2025 to 10.02 million, up 6.3% since 2020.

The numbers confirm that the pandemic‑era shift to regional living has not unwound, with the Regional Australia Institute’s (RAI) latest movers index showing capital‑to‑regional moves accounted for 11% of all relocations between local government areas in the final quarter of 2025, outpacing movement from regions to capitals by 31%, realestate.com.au reported.

This comes as regional house values are rising faster than the combined capitals over the past year, with most top‑performing centres still recording median prices below $1 million, according to PropTrack’s latest Home Price Index.

WA, Victoria, and SA headline the growth hotspots

While regional growth is broad‑based, the strongest percentage gains are concentrated in several key corridors.

In Western Australia, lifestyle areas on Perth’s fringe led the pack. Serpentine‑Jarrahdale, south‑east of the metro area, recorded population growth of 4.5% between 2024 and 2025, underpinned by new estates that will eventually deliver more than 5,000 homes. Further south, the Murray Shire grew 3.9% as projects around South Yunderup expanded local housing options.

In Victoria, Mitchell Shire, about 40km north of Melbourne, posted a 4.3% rise as new developments in towns like Kilmore added to a strong heritage base. South Australia’s Adelaide Plains grew 3.8%, reflecting demand from buyers seeking access to the capital while retaining a semi‑rural lifestyle.

Calls grow for long-term housing and infrastructure planning

Industry bodies warn that without coordinated planning, fast‑growing regions risk severe rental shortages, rising prices, and housing that is increasingly disconnected from local wages.

Nationally, supply is struggling to keep up, with housing completions slipping 1.7% nationally in the December quarter to 43,536, leaving Australia about 77,500 homes short of the National Housing Accord’s target just 18 months into the five‑year plan.  

“Housing must be treated as critical economic and social infrastructure, especially in regions expected to absorb future population and workforce growth,” Housing Industry Association chief executive of industry policy Simon Croft (pictured left) said.

RAI is pushing for a National Population Plan to identify priority growth areas and guide investment in housing, transport, childcare, and health services.

“We know regional Australia is growing, we have had evidence of that going back well before the COVID-19 pandemic. Now we need to support those communities to grow and prosper as Australians vote with their feet and move out to the regions,” chief executive Liz Ritchie (pictured right) said.

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