Riverina MP Michael McCormack has conceded that some residents are at risk of being "priced out" of regions where they have lived their whole lives due to rising migration out of capital cities.
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Mr McCormack made the remarks at a Regional Australia Institute (RAI) webinar, where he was invited to preview the upcoming federal budget's benefits for rural and regional areas.
Regional Development Australia Riverina chairwoman Dianna Somerville, who has a sheep and cropping property at Collingullie, asked Mr McCormack about the "housing shortage in regional Australia" and if the federal government had a plan to deal with "additional strain".
"Property prices are of course increasing due to the demand and also rental prices are going, some would argue, through the roof," Mr McCormack replied.
"It has been very difficult, sometimes, for those people who have lived in areas for some time and then find themselves almost getting priced out of the market.
"[Federal Housing Minister] Michael Sukkar is doing an important job; but working with the states and through the states what we have done is put a considerable amount of money into the HomeBuilder program to make sure we have got the construction industry where it needs to be."
The Australia Bureau of Statistics found regional NSW recorded it's highest-ever migration level, fueled by 13,300 people from Greater Sydney and nearly 14,000 from interstate during the last three months of 2020.
Anglicare last week found that the proportion of rental properties in Wagga that would cost less than a third of a single minimum wage income had fallen from 13 to 4 per cent over the past 12 months.
Some applicants have been unable to find a rental accommodation regardless of price, putting in dozens of applications but getting nowhere due to high demand.
Wagga's median house price also increased by 8.6 per cent over the past year, from $385,000 in March 2020 to $418,250 in March 2021.
Mr McCormack said the federal government could not "do absolutely everything" but had done "more than its share of the heavy lifting" during the pandemic on economic support.
"The remit for housing falls largely on the states and we will work with them to make sure they have got the right support from the federal government," Mr McCormack said.
Mr McCormack said next week's budget would "build upon" the last year's "very good" budget for the regions and said the Inland Rail project was already inspiring confidence in Wagga's special activation precinct, a NSW government project to encourage industrial business growth at Bomen.