1 00:00:03,990 --> 00:00:06,390 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean 2 00:00:06,390 --> 00:00:10,110 Sean Aylmer: Aylmer. Last week we spoke to Tim Lawless from CoreLogic 3 00:00:10,110 --> 00:00:12,898 Sean Aylmer: about house prices, and we looked at regional markets as 4 00:00:12,900 --> 00:00:15,899 Sean Aylmer: well. He made an interesting point about the more fluid 5 00:00:15,900 --> 00:00:18,989 Sean Aylmer: nature of movement from cities to regional Australia and back 6 00:00:18,989 --> 00:00:23,939 Sean Aylmer: again. In short, our population is becoming more mobile. That's 7 00:00:23,940 --> 00:00:27,270 Sean Aylmer: backed up by research from the Regional Australia Institute and 8 00:00:27,270 --> 00:00:31,319 Sean Aylmer: Commonwealth Bank. The Regional Movers Index shows more people from 9 00:00:31,320 --> 00:00:34,229 Sean Aylmer: Sydney and Melbourne are going regional and the number of 10 00:00:34,229 --> 00:00:36,209 Sean Aylmer: people who are going back the other way is at 11 00:00:36,209 --> 00:00:39,780 Sean Aylmer: its highest level in five years. Dr. Kim Horton is 12 00:00:39,780 --> 00:00:43,589 Sean Aylmer: the chief economist at the Regional Australia Institute. Kim, welcome 13 00:00:43,590 --> 00:00:44,339 Sean Aylmer: to Fear and Greed. 14 00:00:44,790 --> 00:00:45,510 Dr Kim Houghton: Oh, thanks, Sean. 15 00:00:46,500 --> 00:00:49,259 Sean Aylmer: So I read the report. It's really interesting, and it 16 00:00:49,259 --> 00:00:53,849 Sean Aylmer: surprised me somewhat. Take me through the capital to regional 17 00:00:53,850 --> 00:00:57,300 Sean Aylmer: migration. How high is it? I'm talking from the capital 18 00:00:57,300 --> 00:00:58,380 Sean Aylmer: cities to the regions. 19 00:00:59,070 --> 00:01:01,529 Dr Kim Houghton: Yeah, it's one of the key directions that we've been 20 00:01:01,530 --> 00:01:04,500 Dr Kim Houghton: looking at. Of course, since COVID kicked off, many people 21 00:01:04,500 --> 00:01:06,539 Dr Kim Houghton: felt what was a big rush to the regions from 22 00:01:06,539 --> 00:01:09,539 Dr Kim Houghton: the capital. So we started working with the Commonwealth Bank, tracking 23 00:01:09,539 --> 00:01:14,490 Dr Kim Houghton: their customers; not individually, it's all done confidential, but every 24 00:01:14,490 --> 00:01:16,529 Dr Kim Houghton: quarter, we look at where their customers have been moving to, 25 00:01:16,950 --> 00:01:20,340 Dr Kim Houghton: and yes, in the March quarter there were more movers 26 00:01:20,370 --> 00:01:22,830 Dr Kim Houghton: out of capital cities to regions than at any other 27 00:01:22,830 --> 00:01:25,230 Dr Kim Houghton: time that we've done the index. And it's a bit 28 00:01:25,230 --> 00:01:28,470 Dr Kim Houghton: surprising because we keep expecting these flows to slow down a bit, 29 00:01:28,949 --> 00:01:32,130 Dr Kim Houghton: but they're still sitting at a level that's about 17% above 30 00:01:32,250 --> 00:01:33,150 Dr Kim Houghton: where we were pre- COVID. 31 00:01:34,470 --> 00:01:36,270 Sean Aylmer: Do you have any insights into why? 32 00:01:37,050 --> 00:01:40,740 Dr Kim Houghton: There's a lot of drivers. A lot of it's around lifestyle, work 33 00:01:40,740 --> 00:01:44,969 Dr Kim Houghton: opportunities in regional Australia. Why the cities were the initial 34 00:01:44,969 --> 00:01:48,600 Dr Kim Houghton: source, I think, were because those COVID issues were felt 35 00:01:48,870 --> 00:01:52,050 Dr Kim Houghton: extensively in the capital cities. And at the same time, 36 00:01:52,320 --> 00:01:54,840 Dr Kim Houghton: it was an interesting year in 2020, there was a 37 00:01:54,840 --> 00:01:59,339 Dr Kim Houghton: real sense of avoided depression in regional Australia right through 38 00:01:59,340 --> 00:02:03,719 Dr Kim Houghton: 2020. Growing seasons were generally good. The rains came; we'd 39 00:02:03,719 --> 00:02:06,539 Dr Kim Houghton: had the droughts up until the previous year. A lot 40 00:02:06,570 --> 00:02:11,370 Dr Kim Houghton: of optimism. The borders were closed, but the tourism sector 41 00:02:11,370 --> 00:02:14,220 Dr Kim Houghton: did not collapse anywhere near as much as people feared. 42 00:02:14,490 --> 00:02:17,550 Dr Kim Houghton: And the actual physical impact of the lockdowns in the 43 00:02:17,550 --> 00:02:19,950 Dr Kim Houghton: capital cities were not felt anywhere near as strongly in 44 00:02:19,950 --> 00:02:21,960 Dr Kim Houghton: the regions. So there was a lot of optimism and a lot 45 00:02:21,960 --> 00:02:25,920 Dr Kim Houghton: of investment actually going through regional businesses in 2020. So 46 00:02:26,010 --> 00:02:28,620 Dr Kim Houghton: job growth was very high. And the big differentiator I 47 00:02:28,620 --> 00:02:32,939 Dr Kim Houghton: think between capitals and metro in that 2020, 2021 period was 48 00:02:32,940 --> 00:02:35,820 Dr Kim Houghton: the rate of job vacancy growth. It really shot up in regions 49 00:02:35,820 --> 00:02:38,549 Dr Kim Houghton: much earlier than it did in the capitals and it went up 50 00:02:38,549 --> 00:02:40,559 Dr Kim Houghton: a lot further than it did in the capitals. So that was a 51 00:02:40,559 --> 00:02:44,460 Dr Kim Houghton: key driver of people leaving the capitals, because finally there 52 00:02:44,460 --> 00:02:47,250 Dr Kim Houghton: was an understanding that there was a good range of 53 00:02:47,250 --> 00:02:49,048 Dr Kim Houghton: jobs available in regional Australia. 54 00:02:50,309 --> 00:02:53,010 Sean Aylmer: And that has flown through to more recent times, has it? 55 00:02:53,639 --> 00:02:56,758 Dr Kim Houghton: It has. We've still got near record levels of job vacancies, around 88,000. 56 00:02:56,758 --> 00:03:01,380 Dr Kim Houghton: The peak was 94, 000 in October last year. They've started 57 00:03:01,380 --> 00:03:03,630 Dr Kim Houghton: to drop in regions, but they're not dropping anywhere near 58 00:03:03,630 --> 00:03:05,700 Dr Kim Houghton: as much as they have in metro areas. I think 59 00:03:06,419 --> 00:03:09,569 Dr Kim Houghton: regional job vacancies are up 6% over the year, metro 60 00:03:09,570 --> 00:03:12,630 Dr Kim Houghton: job vacancies are down 6%. I think metro employers were 61 00:03:12,900 --> 00:03:16,109 Dr Kim Houghton: hit much earlier by their interest rate rises and that 62 00:03:16,109 --> 00:03:18,990 Dr Kim Houghton: sense of slowing down, whereas regional employers kept going. And 63 00:03:19,710 --> 00:03:21,990 Dr Kim Houghton: the mix of jobs has really changed. So the mix 64 00:03:21,990 --> 00:03:24,540 Dr Kim Houghton: of jobs has shifted from sort of low skilled labouring jobs. 65 00:03:24,540 --> 00:03:28,288 Dr Kim Houghton: The majority of jobs now are professional jobs, health education 66 00:03:28,290 --> 00:03:32,040 Dr Kim Houghton: and business professionals, for instance, trades, and then cert three 67 00:03:32,309 --> 00:03:35,219 Dr Kim Houghton: and cert four community service workers. So there's a much 68 00:03:35,219 --> 00:03:38,250 Dr Kim Houghton: wider diversity of jobs available in regional Australia now. The 69 00:03:38,250 --> 00:03:40,620 Dr Kim Houghton: cost of housing has gone up a lot, but it's 70 00:03:40,620 --> 00:03:43,740 Dr Kim Houghton: still around half on average, half what the capital cities are. So the 71 00:03:43,740 --> 00:03:48,360 Dr Kim Houghton: combination of these really rich emerging regional job markets and 72 00:03:48,360 --> 00:03:52,109 Dr Kim Houghton: this ongoing slightly lower level of house prices means that 73 00:03:52,109 --> 00:03:55,200 Dr Kim Houghton: there's still a good livability package available in regional Australia. 74 00:03:55,980 --> 00:03:59,070 Sean Aylmer: Okay. But there's also people going from regions back to 75 00:03:59,070 --> 00:04:02,280 Sean Aylmer: capital cities. It just sounds like the workforce is becoming 76 00:04:02,280 --> 00:04:03,270 Sean Aylmer: more mobile, 77 00:04:03,750 --> 00:04:07,349 Dr Kim Houghton: It's very mobile. And the data from this time around 78 00:04:07,410 --> 00:04:08,909 Dr Kim Houghton: was, it was pretty clear, and we didn't make a 79 00:04:08,910 --> 00:04:11,129 Dr Kim Houghton: big deal of this in the publication because we don't 80 00:04:11,190 --> 00:04:14,010 Dr Kim Houghton: release the actual numbers of movers, but the actual number 81 00:04:14,010 --> 00:04:16,289 Dr Kim Houghton: of movers this quarter was the highest we've seen ever 82 00:04:16,350 --> 00:04:18,810 Dr Kim Houghton: across the whole index. So it means that more people 83 00:04:18,810 --> 00:04:21,420 Dr Kim Houghton: have moved somewhere in this March quarter than in any 84 00:04:21,420 --> 00:04:23,940 Dr Kim Houghton: previous quarter that we've been tracking. And that means cities 85 00:04:23,940 --> 00:04:26,820 Dr Kim Houghton: to regions, regions to cities, but also from one region 86 00:04:26,820 --> 00:04:29,879 Dr Kim Houghton: to another. And the interesting thing for us, again, through 87 00:04:29,879 --> 00:04:32,850 Dr Kim Houghton: the COVID thing was, while there was an acceleration in 88 00:04:32,850 --> 00:04:36,270 Dr Kim Houghton: people leaving cities for regions, there was a real stalling 89 00:04:36,330 --> 00:04:39,029 Dr Kim Houghton: of the flow back the other way. And there's always 90 00:04:39,029 --> 00:04:41,370 Dr Kim Houghton: a two- way flow. People, for lifestyle and family reasons, 91 00:04:41,370 --> 00:04:44,638 Dr Kim Houghton: are always moving back and forth. Very few Australians stay 92 00:04:44,639 --> 00:04:47,969 Dr Kim Houghton: forever in the one spot. And so during COVID, that 93 00:04:47,969 --> 00:04:50,669 Dr Kim Houghton: flow back to cities really slowed down. You can see that 94 00:04:50,670 --> 00:04:54,000 Dr Kim Houghton: very starkly in the data. And that actually created a 95 00:04:54,000 --> 00:04:56,820 Dr Kim Houghton: lot of housing stress, because people weren't leaving their homes 96 00:04:56,970 --> 00:04:59,039 Dr Kim Houghton: available for sale or rent in regions at the same 97 00:04:59,040 --> 00:05:01,469 Dr Kim Houghton: time other people wanted to move from the cities to 98 00:05:01,469 --> 00:05:03,659 Dr Kim Houghton: the regions. So that was one of the key drivers 99 00:05:03,660 --> 00:05:06,780 Dr Kim Houghton: of that housing squeeze that we're seeing. Now that's changing 100 00:05:06,839 --> 00:05:10,589 Dr Kim Houghton: and those migration levels from regions to cities are now 101 00:05:10,589 --> 00:05:12,029 Dr Kim Houghton: pretty much back at the level they were pre-COVID. 102 00:05:13,050 --> 00:05:15,270 Sean Aylmer: Stay with me, Kim. We'll be back in a minute. 103 00:05:21,540 --> 00:05:24,630 Sean Aylmer: I'm speaking to Dr. Kim Houghton, Chief Economist at the 104 00:05:24,630 --> 00:05:29,370 Sean Aylmer: Regional Australia Institute. Okay. So the $ 64 question, where are 105 00:05:29,370 --> 00:05:32,520 Sean Aylmer: people going? Where do people in the cities, what are the regional 106 00:05:32,520 --> 00:05:35,220 Sean Aylmer: destinations that are most popular? 107 00:05:36,000 --> 00:05:38,700 Dr Kim Houghton: Yeah, there's two answers to that. The large numbers of 108 00:05:38,700 --> 00:05:42,178 Dr Kim Houghton: people from cities go to large regional places. That's just the 109 00:05:42,180 --> 00:05:44,488 Dr Kim Houghton: way the numbers flow. So when you look at the 110 00:05:44,490 --> 00:05:47,969 Dr Kim Houghton: share of all the outflows from cities, the places that are getting 111 00:05:47,970 --> 00:05:51,240 Dr Kim Houghton: the largest shares of those outflows are places like Gold Coast, 112 00:05:51,240 --> 00:05:56,580 Dr Kim Houghton: Sunshine Coast, Noosa, Wollongong, Newcastle, Geelong. They're the big ones. 113 00:05:56,820 --> 00:06:00,720 Dr Kim Houghton: Now they're not particularly regional, but they're not capital cities either. 114 00:06:00,720 --> 00:06:04,080 Dr Kim Houghton: So they're kind of sitting in that strange space. So 115 00:06:04,080 --> 00:06:06,539 Dr Kim Houghton: that's where the largest numbers of people go, but what's 116 00:06:06,540 --> 00:06:09,479 Dr Kim Houghton: interesting for us is where the growth rates are high. 117 00:06:09,510 --> 00:06:12,269 Dr Kim Houghton: So though the patterns in those places have been pretty stable ... 118 00:06:12,270 --> 00:06:14,250 Dr Kim Houghton: There's been a little bit of increase and decrease, but 119 00:06:14,250 --> 00:06:16,710 Dr Kim Houghton: generally very similar numbers of people going in and out 120 00:06:16,710 --> 00:06:19,738 Dr Kim Houghton: of those places over the last three years. What's been 121 00:06:19,890 --> 00:06:23,820 Dr Kim Houghton: fascinating though is that smaller places that have shown significant growth. 122 00:06:23,820 --> 00:06:25,529 Dr Kim Houghton: Now some of those might be a growth in inflows 123 00:06:25,529 --> 00:06:28,710 Dr Kim Houghton: from cities, perhaps from five or 10 people a year maybe 124 00:06:28,710 --> 00:06:31,740 Dr Kim Houghton: to 20 or 30. And that doesn't sound like much, but if 125 00:06:31,740 --> 00:06:34,049 Dr Kim Houghton: you're a small place that hasn't seen much population growth 126 00:06:34,410 --> 00:06:36,419 Dr Kim Houghton: in previous years, it can be quite a big change. 127 00:06:36,660 --> 00:06:38,909 Dr Kim Houghton: The standout for us was a strange little place up 128 00:06:38,909 --> 00:06:43,529 Dr Kim Houghton: in the Daintree, Cook Shire. It absolutely leapt in terms 129 00:06:43,529 --> 00:06:47,550 Dr Kim Houghton: of the preferred destination for city dwellers through 2020. Really 130 00:06:47,550 --> 00:06:49,710 Dr Kim Houghton: way off anybody's radar, because it hasn't got an airport, 131 00:06:49,950 --> 00:06:51,509 Dr Kim Houghton: it's a fair drive from Cairns. It hasn't got a 132 00:06:51,509 --> 00:06:53,760 Dr Kim Houghton: whole lot going for it, but it was a really 133 00:06:54,150 --> 00:06:57,120 Dr Kim Houghton: popular destination at the beginning. Through the whole early part 134 00:06:57,120 --> 00:07:01,830 Dr Kim Houghton: of COVID and through 2021, the hotspot destinations in terms of growth were 135 00:07:01,890 --> 00:07:05,340 Dr Kim Houghton: generally sort of places with high amenity along the coast. 136 00:07:05,670 --> 00:07:08,580 Dr Kim Houghton: But as those places became more expensive and harder to 137 00:07:08,580 --> 00:07:12,570 Dr Kim Houghton: find accommodation in, we've seen very clear evidence of people moving inland. 138 00:07:12,930 --> 00:07:15,330 Dr Kim Houghton: So in our last index, places like Port Lincoln in 139 00:07:15,330 --> 00:07:18,330 Dr Kim Houghton: South Australia saw a big influx from cities. So did Livingston in 140 00:07:18,330 --> 00:07:19,950 Dr Kim Houghton: the Capricornia region in Queensland. 141 00:07:20,910 --> 00:07:24,120 Sean Aylmer: Wow, okay. But it kind of changes how we're going 142 00:07:24,120 --> 00:07:27,479 Sean Aylmer: to live though, because if we have a more mobile workforce, 143 00:07:27,480 --> 00:07:31,080 Sean Aylmer: number one, also we have more people going to the 144 00:07:31,080 --> 00:07:35,070 Sean Aylmer: regions, just infrastructure, health, all those sorts of things, we 145 00:07:35,070 --> 00:07:37,230 Sean Aylmer: probably need to start thinking more about that type of thing. 146 00:07:38,099 --> 00:07:40,859 Dr Kim Houghton: We do. And there's a real sort of gap in 147 00:07:40,860 --> 00:07:44,219 Dr Kim Houghton: public and private investment really in all sorts of infrastructure, 148 00:07:44,219 --> 00:07:47,129 Dr Kim Houghton: physical infrastructure and social. And we've seen this very clearly. 149 00:07:47,129 --> 00:07:50,580 Dr Kim Houghton: Those places that have seen significant increases, particularly those inland 150 00:07:50,580 --> 00:07:54,330 Dr Kim Houghton: places whose population trajectories have been fairly flat until recently, 151 00:07:54,720 --> 00:07:58,080 Dr Kim Houghton: they're very tight now in terms of childcare availability, aged 152 00:07:58,080 --> 00:08:02,969 Dr Kim Houghton: care services and outright housing. Virtually none of those areas, 153 00:08:02,969 --> 00:08:06,690 Dr Kim Houghton: and this is not a criticism, had a high growth scenario on 154 00:08:06,690 --> 00:08:08,940 Dr Kim Houghton: the back of their whiteboard when they're doing their regional planning. 155 00:08:09,570 --> 00:08:11,520 Dr Kim Houghton: People sort of get seduced into the whole sort of 156 00:08:11,520 --> 00:08:14,609 Dr Kim Houghton: business as usual thing, which is that inland Australia grows 157 00:08:14,610 --> 00:08:17,730 Dr Kim Houghton: fairly slowly. Now that was the dominant sort of thinking 158 00:08:17,730 --> 00:08:21,059 Dr Kim Houghton: in the locations themselves, and also in the capital cities 159 00:08:21,270 --> 00:08:24,239 Dr Kim Houghton: of their relative state governments. So generally, the states have 160 00:08:24,240 --> 00:08:26,610 Dr Kim Houghton: not been resourcing their regions for the kind of growth 161 00:08:26,610 --> 00:08:29,640 Dr Kim Houghton: that they've actually seen over the last couple of years. So the big 162 00:08:29,640 --> 00:08:33,240 Dr Kim Houghton: challenge I think for investors, and this is public and private, there are 163 00:08:33,240 --> 00:08:37,589 Dr Kim Houghton: significant investment opportunities in regional Australia, particularly around housing and 164 00:08:37,590 --> 00:08:40,739 Dr Kim Houghton: new sorts of medium density housing, which are very undersupplied 165 00:08:40,740 --> 00:08:43,290 Dr Kim Houghton: in regions. There's a hot market for that. We need 166 00:08:43,290 --> 00:08:46,890 Dr Kim Houghton: to get our investors realising and our developers realising that these markets are quite 167 00:08:46,890 --> 00:08:49,770 Dr Kim Houghton: strong and significant and ongoing in regions, so that we 168 00:08:49,770 --> 00:08:54,179 Dr Kim Houghton: end up over the next 10 years in a better place than we have been over the last 10. 169 00:08:54,180 --> 00:08:56,849 Sean Aylmer: Okay. So the March quarter, we had huge numbers of people, 170 00:08:56,849 --> 00:09:01,380 Sean Aylmer: well, relatively huge numbers of people, moving between regions, et 171 00:09:01,380 --> 00:09:03,929 Sean Aylmer: cetera. Where do we go in the future? Do you 172 00:09:03,929 --> 00:09:06,958 Sean Aylmer: think this is a blip, or a spike is a 173 00:09:06,960 --> 00:09:08,910 Sean Aylmer: better way of putting it? Or do you think this 174 00:09:08,910 --> 00:09:09,689 Sean Aylmer: is here to stay? 175 00:09:10,170 --> 00:09:12,150 Dr Kim Houghton: Yeah, look, it's turning into a long blip, isn't it? 176 00:09:12,150 --> 00:09:14,340 Dr Kim Houghton: I mean, we keep expecting that flow out of capitals 177 00:09:14,340 --> 00:09:16,500 Dr Kim Houghton: to slow down. It slowed down a little bit from 178 00:09:16,500 --> 00:09:19,410 Dr Kim Houghton: its big peaks, but not by much. Really pleased to 179 00:09:19,410 --> 00:09:22,020 Dr Kim Houghton: see those flows from regions to capitals back up to normal. 180 00:09:22,020 --> 00:09:25,260 Dr Kim Houghton: That gives me comfort. There's a sort of normality about that. 181 00:09:25,830 --> 00:09:29,190 Dr Kim Houghton: We've done a fairly large survey recently at the institute 182 00:09:29,190 --> 00:09:31,709 Dr Kim Houghton: where we surveyed over a thousand residents of our four 183 00:09:31,710 --> 00:09:35,580 Dr Kim Houghton: largest capital cities, and honestly, about 19% of them said 184 00:09:35,580 --> 00:09:38,280 Dr Kim Houghton: that they're actively considering a regional move in the next 185 00:09:38,280 --> 00:09:41,429 Dr Kim Houghton: two to three years. That's a very large number of people. 186 00:09:41,429 --> 00:09:44,429 Dr Kim Houghton: It's around two million people on sort of current estimates. Now, 187 00:09:44,849 --> 00:09:47,490 Dr Kim Houghton: our history with this is that they say they're going 188 00:09:47,490 --> 00:09:48,630 Dr Kim Houghton: to move in the next two or three years, but 189 00:09:48,630 --> 00:09:51,598 Dr Kim Houghton: typically those actual moves are delayed; luckily, because I don't think 190 00:09:51,599 --> 00:09:53,968 Dr Kim Houghton: regional Australia could cope with another two million people at 191 00:09:53,969 --> 00:09:57,120 Dr Kim Houghton: the moment. We're really squeezed. So I think that survey, 192 00:09:57,360 --> 00:10:00,569 Dr Kim Houghton: plus the fact that our Regional Movers Index is showing 193 00:10:00,570 --> 00:10:04,020 Dr Kim Houghton: consistently high levels of outflows, I think it's sort of 194 00:10:04,020 --> 00:10:06,870 Dr Kim Houghton: shifting from a ... It's almost looking like a bit of a structural change 195 00:10:06,870 --> 00:10:09,208 Dr Kim Houghton: to me now. I'll probably be howled down with the 196 00:10:09,210 --> 00:10:13,260 Dr Kim Houghton: next quarter or the quarter after, but in the medium term, 197 00:10:13,260 --> 00:10:16,110 Dr Kim Houghton: it looks like this is going to stay. These elevated 198 00:10:16,110 --> 00:10:18,630 Dr Kim Houghton: levels of outflows from cities to regions look like they're 199 00:10:18,630 --> 00:10:19,620 Dr Kim Houghton: going to stay for a while yet. 200 00:10:20,280 --> 00:10:22,049 Sean Aylmer: Is there a value judgment ... And I don't mean on 201 00:10:22,050 --> 00:10:25,950 Sean Aylmer: the individuals. People make individual choices. But are we as 202 00:10:25,950 --> 00:10:31,080 Sean Aylmer: a society better if we aren't all concentrated in Brisbane, 203 00:10:31,170 --> 00:10:36,090 Sean Aylmer: Sydney, Melbourne, Perth, plus Adelaide, Darwin and Hobart? Are we 204 00:10:36,090 --> 00:10:38,340 Sean Aylmer: better off if we can disperse ourselves? 205 00:10:39,179 --> 00:10:42,270 Dr Kim Houghton: That's a really interesting question with lots of dimensions. The 206 00:10:42,270 --> 00:10:44,460 Dr Kim Houghton: hard line economist in me we wants to tell you 207 00:10:44,460 --> 00:10:46,590 Dr Kim Houghton: that we did some modeling on that, and yes, nationally, 208 00:10:47,010 --> 00:10:51,120 Dr Kim Houghton: there are net benefits to gross domestic products and productivity 209 00:10:51,210 --> 00:10:54,540 Dr Kim Houghton: from slightly increased growth outside the capital cities and slightly 210 00:10:54,540 --> 00:10:57,480 Dr Kim Houghton: lower levels of growth inside the capital cities. That's demonstrable. 211 00:10:57,719 --> 00:11:00,478 Dr Kim Houghton: That's particularly because our capital cities are losing some of 212 00:11:00,480 --> 00:11:02,400 Dr Kim Houghton: those economies of scale, that some of them are turning 213 00:11:02,400 --> 00:11:05,218 Dr Kim Houghton: into diseconomies of scale because of the sheer size they've got to. 214 00:11:05,879 --> 00:11:08,910 Dr Kim Houghton: On a personal level, most of the growth, and we documented 215 00:11:08,910 --> 00:11:10,199 Dr Kim Houghton: this in our report we did a couple of years 216 00:11:10,200 --> 00:11:12,960 Dr Kim Houghton: ago, most of the growth that's projected for our capitals is in 217 00:11:12,960 --> 00:11:16,920 Dr Kim Houghton: the outer suburban areas. There's a small contribution from increasing 218 00:11:16,920 --> 00:11:19,650 Dr Kim Houghton: density. So what we're doing on our business as usual 219 00:11:19,650 --> 00:11:22,289 Dr Kim Houghton: path is pushing more people to the fringes of Melbourne, 220 00:11:22,289 --> 00:11:26,069 Dr Kim Houghton: Sydney, Brisbane, and Perth. Now, the characteristics of those people 221 00:11:26,070 --> 00:11:28,890 Dr Kim Houghton: are very similar to the characteristics in the social and 222 00:11:28,890 --> 00:11:32,760 Dr Kim Houghton: economic sense to people who are living in our inland regional cities. So on a 223 00:11:32,760 --> 00:11:36,360 Dr Kim Houghton: sort of person to person basis, there's a big win 224 00:11:36,360 --> 00:11:38,340 Dr Kim Houghton: actually in shifting out of the outer suburbs of Melbourne 225 00:11:38,340 --> 00:11:40,289 Dr Kim Houghton: into Bendigo or Ballarat. You've got a lower cost of 226 00:11:40,289 --> 00:11:42,510 Dr Kim Houghton: housing, you've got a more commutable city, and you've got 227 00:11:42,510 --> 00:11:44,640 Dr Kim Houghton: that better quality of lifestyle, and yet your social and 228 00:11:44,640 --> 00:11:49,440 Dr Kim Houghton: economic characteristics are barely changing with that move. And yet our 229 00:11:50,340 --> 00:11:54,929 Dr Kim Houghton: planners and our state leaders are really sort of continuing on this 230 00:11:55,380 --> 00:11:57,239 Dr Kim Houghton: path that says, " Yep, yep, we'll be right. Our cities 231 00:11:57,240 --> 00:11:58,739 Dr Kim Houghton: are going to get bigger and they're going to grow 232 00:11:58,740 --> 00:12:01,290 Dr Kim Houghton: on the fringe." Personally, I don't think that's good for 233 00:12:01,290 --> 00:12:03,449 Dr Kim Houghton: the individuals, and I think we can see from the 234 00:12:03,449 --> 00:12:05,730 Dr Kim Houghton: analysis we've done that it's not really good for the 235 00:12:05,730 --> 00:12:06,720 Dr Kim Houghton: national economy either. 236 00:12:07,320 --> 00:12:09,120 Sean Aylmer: Kim, thank you for talking to Fear and Greed. 237 00:12:09,420 --> 00:12:10,950 Dr Kim Houghton: Ah, great pleasure, Sean. Nice to talk to you. 238 00:12:11,759 --> 00:12:14,549 Sean Aylmer: That was Dr. Kim Houghton, Chief Economist at the Regional 239 00:12:14,549 --> 00:12:17,669 Sean Aylmer: Australia Institute. This is the Fear and Greed Daily interview. 240 00:12:17,670 --> 00:12:19,740 Sean Aylmer: Join us every morning for the full episode of Fear 241 00:12:19,740 --> 00:12:23,400 Sean Aylmer: and Greed, Australia's most popular business podcast. I'm Sean Aylmer. 242 00:12:23,640 --> 00:12:24,358 Sean Aylmer: Enjoy your day.