How a Key Housing Trend Is Shaping Regional Living Decisions

Regional Australia is becoming more appealing than ever. For many, the promise of a slower pace of life, more space, and affordability is hard to resist. But while the regions are attracting attention, the reality for prospective buyers and renters is that finding the right home isn’t always easy.

Across most communities, housing is in short supply, a challenge that affects both metropolitan and regional areas. In regional towns, the issue is particularly pronounced, as most available homes are detached houses with three or more bedrooms. Smaller, low-maintenance homes, such as one- or two-bedroom properties, townhouses, or units are scarce, despite being highly sought after by young professionals, downsizers, and key workers.

For those looking to invest in property or secure the perfect home, guidance from a trusted buyers agent can make all the difference. At Key 2 Wealth, we help clients navigate the regional property market to find investment properties and lifestyle homes that meet their needs.

This mismatch between demand and supply is shaping how Australians think about regional living and influencing where and how people are choosing to settle outside the cities.

In regional communities, where land is plentiful, it is natural that developers have focused on building detached homes with plenty of space. However, this approach can leave some prospective residents feeling that the available homes are not designed for their needs.

Data from the 2021 Census and the Regional Australia Institute highlights the imbalance. Regional areas are much less likely to offer one- or two-bedroom properties compared to metropolitan areas.

• Only 11% of homes in regional Australia are studios or one-bedroom properties, compared with 15% in cities.
• Two-bedroom homes make up 28% of regional housing, compared to 34% in metropolitan areas.
• For larger homes, the trend reverses. 61% of homes in regional areas have three or more bedrooms, versus 51% in metro areas.

This disparity is even more pronounced in the rental market. In capital cities, nearly 50% of rental properties are one- or two-bedroom homes, while in regional areas, they account for less than 40%.

Overall, this demonstrates that detached houses dominate the housing market in regional Australia. Many residents do not need a large three-bedroom home. Smaller, low-maintenance options such as townhouses or units are preferred by some, but these are typically in short supply in regional areas.

The Regional Australia Institute says that certain groups are more likely to want smaller, low-maintenance homes. This includes young professionals, key workers on regional projects, and older people.

However, in most regional areas, there are very few apartments or townhouses to choose from. Most homes are detached houses, which make up 81% of housing in regional Australia.

Even though there is demand for smaller homes, the building trends are changing slowly. Data from the Australian Bureau of Statistics and the Regional Australia Institute shows that in 2024, 72% of new homes approved in regional areas were detached houses, only slightly less than the long-term average of 77%.

Some exceptions exist. Regional cities like Newcastle and the Gold Coast are seeing more apartments and townhouses being built, giving people more housing choices.

Regional Australia is attracting more people than ever, thanks to lifestyle benefits, affordability, and more space. However, the housing market in these areas is still largely dominated by detached houses, with smaller, low-maintenance homes like townhouses and apartments in short supply.

Although demand for multi-dwelling properties exists, systemic barriers such as high infrastructure costs, rising construction expenses, and longer build times are slowing the development of these homes. Exceptions in regional cities like Newcastle and the Gold Coast show that change is possible, but across most regions, detached houses remain the main type of housing being built.

For investors and buyers, understanding these trends is crucial. Smaller homes and alternative housing options are limited, making it important to have expert guidance from a trusted buyers agent.

At Key 2 Wealth, we help clients across Australia find the best opportunities for both investment properties and lifestyle homes. Whether you are a first-home buyer, an investor, or planning to buy a property using your superannuation (SMSF), our team provides expert advice and support to help you make informed decisions.

Contact Key 2 Wealth today to start your property journey:
Phone: 0430 777 184
Email: info@key2wealth.com.au

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