A new study suggests you should move out of your home if you can no longer afford it.
It says the average income of Australians living in rural areas in the country’s north-west has dropped by around 5 per cent over the past five years, compared with the same time period in the west.
“It’s really important to recognise that the income gap between urban and rural areas is widening,” says Professor John McClellan, from the University of Sydney’s School of Architecture and Planning.
“The median household income in rural Australia has actually increased by 6.5 per cent between 2011 and 2016.”
He says this has been driven by the rapid expansion of mining and the consequent decline in agricultural production in the region.
“In rural areas, there’s a large amount of the agricultural workforce that’s retired, people are moving away to cities,” he said.
“We’re also seeing a lot of the construction industry and industry coming in.”
Dr McClellans work in the city, so he’s not surprised to hear that the average household income has been falling.
But he says it’s important to note that this has happened in the same period as Australia has experienced a series of severe weather events.
“There have been a number of storms that have had devastating impacts on the country,” he says.
“So we’re seeing a large number of households struggling to keep their houses and their businesses afloat.”
And it’s not just weather events that have caused some families to consider moving out of their homes.
“You’ll also see a number, in my experience, of families who have been impacted by the cyclone that hit Queensland in the last two weeks,” he adds.
“People have lost their homes, their properties, their business.”‘
I don’t want to lose my home’When Professor McClellians study began, there was a small community of homeowners in his home state of Victoria.
“They were very worried that their home would be lost if they moved,” he told ABC Radio Melbourne.
“But when we looked at the average values of houses in their communities, it looked like it was probably going to be quite a big price for them to lose their homes.”
So Dr McClelloans and his colleagues decided to take a closer look at what the average house price was in rural and urban areas.
“I think it’s very important to understand what’s happening in rural communities when you look at the property market, because if you don’t understand the properties that are available in rural, you can miss out on a lot,” he explains.
“This is a big problem because it means that a lot more people in rural than in urban areas are going to have to make some decisions in terms of where to live, or where to invest, because of the shortage of houses.”
For example, in rural Victoria, the average median house price is now $2.1 million, a drop of more than $100,000 over five years.
The researchers also looked at what has happened to the median annual income of rural households.
“That’s a very important piece of information, because it tells you how well families are doing economically, and whether they’re making ends meet,” Dr McCléllans says.
“It’s also an indicator of the health of the economy in rural Queensland.”
So what’s causing this decline?
There are several factors at play, but Dr McCllllans believes there are several major factors that are contributing to the decline in rural income.
He says the biggest one is a combination of things: a lack of affordable housing in the state, a decline in mining activity in the past decade and a rise in climate change.
“One of the big factors that we’re finding in rural rural communities is that there’s not enough housing available,” he explained.
“And one of the things that has contributed to that is the closure of coal mines, because there’s no room to build.”‘
It’s very hard to find jobs’There are also a number people who are moving to the cities for work, and these people often have a higher income than those in rural settings.
“When we started this research, we didn’t even think it was possible to find enough work in these areas to pay people rent,” Dr Marla Linnane from the Queensland Poverty Reduction Program (QPRP) told ABC Rural.
“With the construction boom in rural South Australia, we’re also finding that many of these people who were originally living in urban settings, are now working in remote locations.”
Some of those are people who have moved to cities to look for work.
“The QPRP says the problem is getting worse, not better.”
And then some of those jobs will be in jobs that don’t require a degree, that don, you know, require a high level of education.”