December 12, 2019 by Dymphna

From water crisis to housing boom?

Tamworth is facing a water-crisis. Can you grow your way out of trouble?

Let’s think a little about investing in regional areas. A lot of students without a lot of money to work with, when they’re starting out, do really well investing in regional areas. The price points are accessible and there can be opportunities to manufacture some quick equity gains.

You can also see some market growth in larger regional centres, especially when there’s a new industry opening up or some major infrastructure being put in place.

Major infrastructure spending can lead to an increase in the population, which leads to an increase in housing demand, which can lead to an increase in prices.

Read that sentence again and make sure you’ve got the causality right. Because this is something I see a lot of people – people who should know better – get wrong.

Take, for example, the lovely town of Tamworth.

You might read that the town has plans to increase its population from 60,000 to 100,000 in less than twenty years.

The local government area grew by just under 1 per cent from 2017 to 2018, Australian Bureau of Statistics data shows. “We need to increase the growth rate to a bit over 2 per cent,” acting mayor Phil Betts said. “It is an ambitious target but it’s possible…”.

So we’re looking at some pretty rapid population growth, right? So that’s a good thing, right? Australia’s next hot-spot?


But remember that Tamworth is facing a brutal water-crisis:

The once-proud Peel River – also described as a “glorified creek” by those who know and love it – is the lifeblood to the city of 62,000, which is heavily dependent on agriculture and was facing the prospect of running dry in six months without urgent intervention…

Mayor Col Murray said the city had no groundwater and had run out of alternatives.

“You can’t truck water to a city like Tamworth, it’s just not an option,” he said. “You would have to have a B-double load of water unloading every six minutes, 24/7. That’s just not practical – you wouldn’t have trucks available and … where would you get the water?”…

That sounds like a problem, but Tamworth authorities believe that, paradoxically, the solution is… even more people!

Tamworth Mayor Col Murray also believes that a growing population is needed to solve Tamworth’s water crisis:

While water is a major concern for the city presently, the mayor said a growing city would demand government investment in greater security.

“I would argue we have got no chance of increasing our water security without having population growth,” [Mayor Col Murray] said.

“That’ll force it to happen.

“I have absolutely got no concerns that there’ll be water for the future, providing we have got the plan and got the population growth to strengthen it.”

Ok, that’s some pretty tangled logic there, I reckon.

Yes, more people would create a water-crisis (like there isn’t one already) and that might force state and federal governments to throw some money at the problem.

But who is moving to Tamworth on that basis?

“Come to Tamworth because if you come the water crisis will get even worse, and then (we hope) someone might do something about it.”

(I wouldn’t.)

And look, I feel for Tamworth. It’s a beautiful town and I really hope they find a way out of this crisis. I also really hope they meet their ambitious population targets. It’s a town that deserves to be a major centre.

But what politicians always seem to forget is that the primary driver of population growth is jobs. People go where the jobs are.

You don’t grow the population and then back-fill infrastructure and industry afterwards.

And if you don’t have a plan for jobs – creating new industries and employment opportunities – then you don’t have a plan for population growth.

And so if you’re investing in regional areas, this is what you’ve got to be asking yourself. If there are projections for strong population growth, what’s driving it?

Where are the jobs coming from? What industries are on the up and up?

When you’re doing your research into regional centres, the economics always has to be your first port of call.