As COVID-19 continues to play out across the country, it appears as though regional Australia could be on the cusp of a revival.
With many inner-city areas suffering from severe job losses and a lack of migration, regional Australia could stand to benefit from both changing sentiment and strengthening local industries.
It might come as a surprise that not all industries have been impacted by widespread job losses. In fact, there are six out of the 19 major industries that have seen an increase in jobs since February. Those industries include utilities, agriculture, public admin, finance, real estate, wholesale trade and together they have added 100,000 new jobs to the economy. On the flip side, these new jobs haven’t been enough to cover the 922,000 jobs that were lost in the other 13 industries.
Six out of the 19 official industries managed to create new jobs since February. The successful six industries (utilities, agriculture, public admin, finance, real estate, wholesale trade) collectively added 100,000 jobs — not nearly enough to make up for the 922,000 jobs lost in the contracting 13 industries but enough to warrant a closer look at the geographic concentration of these job-creating industries.
How different industries are weathering the COVID storm
Total employment by industry in Australia in February and May 2020
|Industry||May Quarter 2020||February Quarter 2020||Difference May 2020 to Feb 2020 (%)||Difference May 2020 to Feb 2020 (#)|
|Electricity, Gas, Water and Waste Services||169||136||24%||32|
|Agriculture, Forestry and Fishing||361||337||7%||24|
|Public Administration and Safety||846||829||2%||18|
|Financial and Insurance Services||490||474||3%||15|
|Rental, Hiring and Real Estate Services||220||214||3%||6|
|Information Media and Telecommunications||188||212||-11%||-24|
|Administrative and Support Services||393||450||-13%||-57|
|Education and Training||1036||1097||-6%||-61|
|Professional, Scientific and Technical Services||1109||1172||-5%||-63|
|Health Care and Social Assistance||1731||1798||-4%||-67|
|Arts and Recreation Services||160||252||-36%||-92|
|Transport, Postal and Warehousing||572||666||-14%||-95|
|Accommodation and Food Services||654||931||-30%||-276|
Interestingly, Australia’s towns that have a heavy focus on public service and the military often have an employment profile that makes them very resilient during downturns. That’s clear in cities such as Canberra in which 36% of the workforce comprises Government jobs which are the safest of all.
Government and military jobs soften the fall
Share of workers employed in industries that have grown during COVID-19
|Town name||Growth industries|
|Canberra - Queanbeyan||35.6%|
|Jobs outside of the state's largest cities (ACT)||31.3%|
|Jobs outside of the state's largest cities (SA)||29.2%|
|Jobs outside of the state's largest cities (OT)||27.4%|
|Jobs outside of the state's largest cities (WA)||26.4%|
|Jobs outside of the state's largest cities (Qld)||26.3%|
|Jobs outside of the state's largest cities (NT)||26.2%|
|Jobs outside of the state's largest cities (NSW)||25.8%|
|Jobs outside of the state's largest cities (Vic)||25.7%|
|Jobs outside of the state's largest cities (Tas)||25.0%|
|Traralgon - Morwell||21.1%|
|Moe - Newborough||21.0%|
|Mildura - Wentworth||21.0%|
|Warragul - Drouin||19.9%|
|Nowra - Bomaderry||19.9%|
|Gisborne - Macedon||18.3%|
|St Georges Basin - Sanctuary Point||18.1%|
|Albury - Wodonga||17.3%|
|Shepparton - Mooroopna||16.7%|
|Newcastle - Maitland||15.2%|
|Burnie - Wynyard||15.2%|
|Victor Harbor - Goolwa||15.2%|
|Echuca - Moama||14.1%|
|Bowral - Mittagong||14.1%|
|Forster - Tuncurry||13.7%|
|Morisset - Cooranbong||13.6%|
|Gold Coast - Tweed Heads||13.4%|
|Gladstone - Tannum Sands||12.4%|
|Kalgoorlie - Boulder||12.0%|
At the same time, there are a number of agricultural towns with 2000 to 5000 residents that have very secure employment. Robinvale in Victoria (36 per cent) and Woolgoolga in NSW (35 per cent) are two examples.
The 30 towns with the most COVID resilient job profile
|Town name||State||Growth industries|
|Canberra - Queanbeyan||Australian Capital Territory||35.6%|
|Alice Springs||Northern Territory||23.9%|
|Port Lincoln||South Australia||22.7%|
|Murray Bridge||South Australia||22.2%|
|Port Augusta||South Australia||22.0%|
|Traralgon - Morwell||Victoria||21.1%|
|Moe - Newborough||Victoria||21.0%|
|Mildura - Wentworth||New South Wales||21.0%|
|Warragul - Drouin||Victoria||19.9%|
|Nowra - Bomaderry||New South Wales||19.9%|
|Griffith||New South Wales||19.3%|
|Lithgow||New South Wales||19.2%|
|Grafton||New South Wales||19.1%|
|Goulburn||New South Wales||19.1%|
|Sydney||New South Wales||19.1%|
|Wagga Wagga||New South Wales||18.6%|
|Mount Gambier||South Australia||18.6%|
|Gisborne - Macedon||Victoria||18.3%|
|St Georges Basin - Sanctuary Point||New South Wales||18.1%|
|Parkes||New South Wales||17.9%|
The 30 towns with the most vulnerable COVID job profile
|Town name||State||Growth industries|
|Port Pirie||South Australia||11.4%|
|Kalgoorlie - Boulder||Western Australia||12.0%|
|Port Hedland||Western Australia||12.2%|
|Taree||New South Wales||12.3%|
|Gladstone - Tannum Sands||Queensland||12.4%|
|Ulladulla||New South Wales||13.0%|
|Mudgee||New South Wales||13.4%|
|Gold Coast - Tweed Heads||Queensland||13.4%|
|Morisset - Cooranbong||New South Wales||13.6%|
|Forster - Tuncurry||New South Wales||13.7%|
|Lismore||New South Wales||13.8%|
|Ballina||New South Wales||14.0%|
|Bowral - Mittagong||New South Wales||14.1%|
|Echuca - Moama||Victoria||14.1%|
|Camden Haven||New South Wales||14.5%|
|Batemans Bay||New South Wales||14.6%|
|Kempsey||New South Wales||14.7%|
Key Trends to Benefit Regional Areas
Aside from simply secure jobs, there are four other key trends that lend themselves to regional Australia.
Traditional regional industries including agriculture and manufacturing will see a renewed focus in post-COVID Australia. After seeing empty shelves at supermarkets, the ability to produce local products is going to be a changing feature of the economy that will benefit the regions.
Similarly, the ability to manufacture medical equipment locally will also be important as we saw from the lack of ventilators and mask early on. This will benefit affordable areas and the outer suburbs of major cities as well as regional areas.
Government spending will also be a key focus for many areas going forward. A quick way to generate jobs is through Government spending on new infrastructure projects. Many of these projects have been brought forward by the various state governments with a clear focus on rail and road connections between the capital cities and regional centres. This will provide a boost to jobs and help with any slump from a lack of migration.
The third factor to benefit regional Australia is the changing attitude towards living in the country. After being forced to stay locked down in small inner-city apartments, low-density living starts to become far more appealing. Low-density living is possible in our capital cities but the price tag is high.
A large demographic change that we are likely to see for the remainder of the 2020s will be Millenials (born 1982 to 1999), starting families and looking to move into larger family homes. These types of bigger dwellings are much more affordable in regional areas and could provide a strong reason for many to move away from inner Melbourne and Sydney.
Finally, the COVID enforced lockdowns forced a large change in the way many Australians work. The ability to work from home was thrust upon us and a number of employees and employers realised that this was not only possible but even preferable.
For those looking to work from home, dwellings need to be larger and equipped with room for a study and again these will most likely be located far from the CBDs of our major capital cities. If you earn an inner-city level income and can work from home, regional areas provide a great value for money option.
For the time being, the shift towards the regions is simply an intellectual one as population data won’t be available from the ABS until the end of March 2021.
In the meantime, we can look to up-to-date residential property data from Ripehouse Advisory to gain an understanding of how the Australian people reshuffle themselves post-COVID.
The tables have turned: regional jobs appear safer than urban jobs during COVID-19
Share of workers employed in industries that have grown since COVID-19, by remoteness
Transactions Increasing in the Regions
A number of local government areas in the capital cities have seen a sharp drop in transactions between July 2019 to July 2020. When new migrants don’t arrive, there is a significant drop in demand for property.
This often doesn’t show up in median property values as unsold apartments won’t be considered in the calculations. As such, prices in these inner-city areas might even go up in value as the top-end of the market keeps improving.
The largest increase in transactions has been seen in Wodonga, which recorded a 75% increase over the past 12 months, while median values have been falling. The decline is due to the shift towards lower-priced entry-level homes such as apartments. This is due to young people coming to the area and buying lower-priced starter homes.
In other regional areas, transactions increased and house prices also went up. Good examples of this are Ballina and Warrnambool. This was due to demand driving up prices, thanks to those with inner-city incomes looking to enter the regional housing markets. Another indicator that a revival in regional markets is underway.
As it stands all the data is suggesting that Australia’s small towns might just be the big winner in post-COVID Australia.