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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% |
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