Regional Australia is experiencing a cruel population paradox.
It has cheap land, councils are offering rates relief, and there's no shortage of would-be buyers — but there are no vacant houses or builders for new ones, and banks are baulking at financing loans.
The situation is, according to Kim Houghton from the Regional Australia Institute, an absolute "mess".
He blames a "cocktail of ingredients" including poor planning and increased migration away from capital cities.
But councils across the nation are getting creative, making bold decisions, and trying to find solutions to the housing squeeze.
In north-west Queensland, where towns are dealing with an influx of temporary horticulture and government workers, the Flinders Shire Council is auctioning off 48 council-owned blocks today to encourage people to build homes.
Housing is in such short supply that the council recently repurposed 76 dongas at a caravan park in Hughenden, but Mayor Jane McNamara said that was still not enough.
"We have more than 100 people registered so far for the auction, so I'm feeling very confident at the moment," she said.
"It's all about sustainability. We must take our future into our own hands."
'It's just crazy'
Quilpie Shire, in outback Queensland, tried a similar tactic in 2021, selling more than 10 council-owned blocks for between $45,000 and $70,000 each.
But Mayor Stuart Mackenzie said 14 months later not a single house had been built because the landowners could not get a loan.
"People out here just can't secure finance, it's the fundamental issue we have," he said.
"It is time for the banks to relax the criteria for the deposits required and to reassess how they lend.
"They'll lend less or you'll need bigger deposits when you get out into the regions."
Given the challenges, Mr Mackenzie said the Quilpie Shire tried to step in and build a block of townhouses but that project hit a snag when the builder sent them the quote.
"Instead of a house that should cost $400,000 to build, they're tendering at $800,000 to $900,000," he said.
"It's just crazy."
A similar story is unfolding on the West Coast of Tasmania, where mining has again taken off, but instead of cheap land, the council is offering a three-year freeze on rates to anyone who builds a new home.
West Coast Mayor Shane Pitt said there were no rentals available and, in some towns, properties were selling within days of being listed.
"I'm born and bred here and this is the worst I've seen it," he said.
"There is a big demand for housing and it is holding back development on the West Coast."
Where do you go if you sell?
Across regional Australia, the property market is softening with CoreLogic data pointing to a 20 per cent decline in listings in the first two months of 2023 compared with the same period last year.
But demand remains strong.
Toowoomba real estate agent Hannah Johnson said open homes were attracting around 30 or 40 people and, even after this week's interest rate rise, her agency sold a house at auction above the reserve price.
Ms Johnson said the continued migration of people away from bigger cities was insulating towns like Toowoomba from the downturn.
"[It would be] fair to say that 50 per cent of buyers looking through are not from Toowoomba. We're getting a lot from the Gold Coast, Sunshine Coast, and Brisbane," she said.
"There's not enough stock and no-one wants to sell because where do they go?"
High-rises in the regions
The acute housing shortage led the Dubbo Regional Council to make what would ordinarily be considered a highly controversial move — it approved three high-rise apartment blocks, up to 14 storeys tall, in a town of 55,000.
In total, the three complexes will provide 200 apartments.
Mayor Mathew Dickerson said the community responded with "excitement and interest".
"The fact they're selling these apartments off the plan in Dubbo is really quite incredible," he said.
But no-one has moved in yet because — just like everywhere else — the skyrocketing cost of construction is delaying the development.
The Regional Australia Institute's Kim Houghton said it was the tightest housing market he had seen in his 30-year career.
But he said he was excited to see towns like Dubbo embracing development and planning for the future.
"It's not the kind of thing you'd expect from a large, inland city, to see high-rise of this scale," he said.
"We know from the research we've done that the market is there and it's good to see the council [supporting] development."
Mr Houghton said it was also encouraging that the community was also "seeing the opportunity and getting on board with it".
But he acknowledged it was "very unusual" to see high-rise buildings in regional areas and said it was not something that would appeal to all towns.
