Unprecedented population growth in the Hunter means the region's needs will likely exceed its housing targets, sparking a call for greater residential investment to keep up with demand.
The Property Council of Australia and Gyde Consulting have released a new Regional NSW Housing Analysis report looking at residential needs and trends.
The report said while the region was on track to meet the demand of 84,700 dwellings by 2041 which the NSW Department of Planning and Environment forecast in 2019, that projection did not anticipate the "recent and potentially ongoing" substantial population growth in Greater Newcastle already placing pressure on the existing supply and delivery of housing.
The population growth rate across the Greater Hunter has increased from 0.8 per cent in 2014 to 1.2 per cent in 2020, according to Australian Bureau of Statistics data.
Maitland is leading the way at 2.63 per cent, followed by Cessnock at 2 per cent, then Port Stephens at 1.19 per cent, Newcastle at 1.04 per cent and the largest council area Lake Macquarie at 0.67 per cent.
"In Greater Newcastle some LGAs are experiencing substantially higher annual growth rates than projected by DPE in 2019," the report said.
"Port Stephens has more than doubled its projected growth rate, while Maitland and Cessnock have seen an increase of around 1 per cent respectively."
The Department of Planning and Environment has recently updated its population projections, with an 86,703 more people expected to reside in the Greater Hunter in 2041 than what was predicted three years ago - an increase of 10 per cent.
Conversely, Sydney's population forecast has been revised down by 14 per cent over the same time period.
Increased domestic migration to the region has been well documented since the outset of the pandemic, exemplified in the Regional Australia Regional Movers index which showed four per cent of people who relocated from Australian capital cities in 2021 moved to either Lake Macquarie or Newcastle.
This came on top of existing constraints such as short term residential accommodation, second home purchases and the availability of serviced land.
The report also noted that more people who would have traditionally left the region before the pandemic opted to stay and a "significant proportion" of the NSW population also entered the housing market.
The number of new loans to first home buyers across the state almost doubled from 11,509 in 2019 to 20,985 in 2021.
The Property Council's Hunter regional director Anita Hugo said there were a number of initiatives that could be introduced to help meet the growing demand the region is experiencing.
"The Hunter is facing significant housing and rental market stress, an agile approach to housing that takes a strategic look at housing diversity across LGAs as well as serviced land will be critical to alleviate this going forward," she said.
"Deliberate planning that enforces targets and encourages scalable supply of new housing based on serviceability will be critical.
"Improved data metrics will assist in determining the strategic alignment of the growth currently occurring in the broader region."
The report said the next round of projections issued by the department would likely reflect the increased population growth in the region, resulting in higher implied dwelling requirements.
"It will be critical to update strategic plans to reflect the revised figures, and use them to establish housing targets, in order to enable the necessary delivery of dwellings for the region," the report said.
"This will also provide an opportunity to create a more agile strategic plan, which enables scalability in housing delivery to reflect periods of increased or decreased demand."
More updated strategies for the Hunter's future are set to be published in a new Hunter Regional Plan, which maps out a 20-year blueprint for the region's prosperity.
The last regional plan was published in 2016, but a new one is due in the third quarter of this year after a draft was exhibited from late last year into March.
The draft 2041 plan acknowledged the significant impact COVID-19 has had on people's movement since the previous plan.
