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Investing in the regions: Westpac lending data shows regional renaissance for businesses

22 January 2025

Australian regional centres are benefiting from stronger business investment growth than capital cities, according to new business lending data from Westpac.

 

Westpac lending to businesses in regional areas has increased 12.4 per cent over the past two years, while metro areas have seen an 11.3 per cent increase, according to the data, which shows the highest growth regions by percentage for Westpac business lending from November 2022 to October 2024.

 

“As we’re seeing more Australians move from capital cities to regional areas in search of more affordable housing and lifestyle factors, Australian businesses are following suit,” said Shane Howell, Westpac General Manager of Commercial Banking.

 

The trend in regional Victoria is particularly pronounced, with an 18 per cent increase in Westpac lending to businesses in the regions compared with a 9 per cent increase in metro areas. In Tasmania, the regions saw 25 per cent business lending growth while Hobart recorded a more subdued 10 per cent increase.

 

“While this data shows only Westpac business lending growth, in most regions it’s representative of economic activity overall,” Mr Howell said.

 

Some of the regional centres where Westpac is seeing the highest percentage growth for business lending are Coffs Harbour, Launceston, Tweed Heads, Bendigo, Mackay and the Gold Coast.

 

“These are localities where it is often cheaper to do business than in capital cities, so businesses can minimise risk, and they’re thriving regional hubs where young families are increasingly relocating, giving businesses access to talent in a tight labour market. Some of the key industries experiencing growth include services like healthcare and education, as well as manufacturing, industrial logistics, property and agriculture,” Mr Howell said.

 

“In Victoria the trend is particularly strong. While we’ve seen a lot of media coverage about constrained business growth in Victoria recently, our data and experience tell us that doesn’t apply to regional areas – quite the opposite. Businesses are recognising the opportunity of the regional renaissance in Victoria, with more people moving out of the CBD for lifestyle and cost of living factors and businesses are making the most of cheaper land prices and highly receptive regional councils who want to attract businesses to the regions.

 

“In Tasmania, which has the fastest growing ageing population in the country, a big trend we’re seeing is growing investment in healthcare. It’s also a state where the engine room of the economy is regional, thanks to thriving agribusinesses, so it’s no surprise that regional areas are outperforming Hobart for business lending and investment,” Mr Howell said.

 

“Meanwhile the Gold Coast is one of Australia’s fastest growing economic regions thanks to strong interstate migration and diverse business investment and we’re seeing a tangible shift in momentum there, with major construction activity and housing growth. In part this is a consequence of a strong planning regime, and compared to larger cities the Gold Coast still has more economic capacity to grow.”

 

In some states metro areas are still dominant for business lending growth, including NSW, WA, QLD and SA, and in all states except Tasmania the volume of business lending remains higher in the population dense capital cities.

 

“Australia is a country of rich diversity and geographical complexity, and our business customers reflect that diversity,” Mr Howell said.

 

“No two states or segments are the same and each has its own unique challenges and opportunities. For example, in this environment where discretionary spending is tight, we’re seeing constrained growth in industries like hospitality and retail, but it’s a different story for industries like professional services and healthcare, which are performing strongly.

 

“One thing that’s clear in speaking with our customers, is that the trend towards doing business and investing in regional Australia is very real and I think we’ll see a lot more growth in regional areas over the next decade,” he said.

 

Westpac business lending growth – state by state

State Region Business lending
(total committed exposure) % growth (Nov 22 - Oct 24)
NSW / ACT Metro 9.6%
NSW / ACT Regional 8.2%
VIC Metro 9.1%
VIC Regional 18.1%
QLD Metro 15.3%
QLD Regional 12.6%
SA Metro 17.6%
SA Regional 12.9%
WA Metro 14.3%
WA Regional 8.8%
TAS Metro 10.1%
TAS Regional 25.3%
NT Metro -13.1%
NT Regional 3.4%

Westpac business lending growth – top regions per state

State Highest growth regions Metro / Regional Business lending (total committed exposure) % growth (Nov 22 - Oct 24)
NSW/ACT Coffs Harbour Regional 67.5%
  North Canberra Metro 60.0%
  Central Macquarie (excl. Dubbo) Regional 52.4%
  Tweed Heads & Tweed Coast Regional 38.4%
  Northern Central Plain (Moree, Narrabri, Wee Waa) Regional 37.7%
VIC South Wimmera (Horsham, Haven, Natimuk) Regional 56.2%
  Melton-Wyndham Metro 40.7%
  Hopkins (Timboon, Mortlake, Camperdown) Regional 38.4%
  Greater Bendigo City  Regional 36.9%
  Wellington Shire Regional 34.4%
QLD Fitzroy Shire Regional 36.4%
  Mackay region Regional 32.3%
  South West (Roma, Wallumbilla, St George, Charleville) Regional 30.4%
  Logan City Metro 26.2%
  Gold Coast North Regional 23.4%
SA Upper South East (Naracoorte, Robe, Kingston) Regional 33.1%
  Lower North (Burra, Balaklava, Clare, Eudunda) Regional 31.4%
  Flinders Ranges Regional 22.8%
  Murray Mallee (Murray Bridge) Regional 21.8%
  Western Adelaide Metro 21.3%
NT Lower Top End (Mataranka, Katherine) Regional 32.2%
  East Arnhem Regional 20.2%
WA Pallinup Regional 50.3%
  Avon Regional 27.6%
  South West Metropolitan Metro 26.3%
  Fortesque Regional 18.9%
  South East Metropolitan Metro 18.8%
TAS Greater Launceston Regional 38.6%
  Burnie - Devonport Regional 27.3%
  Central North (Ross, Deloraine, Bellingham) Regional 16.1%
  North Western Rural (Smithton, Currie, Sheffield) Regional 11.9%
  Greater Hobart Metro 10.1%

 

ENDS

 

Media Contact:

media@westpac.com.au