Essential Workforce Hit by Rental Affordability Crisis

Generic real estate image from the Queensland suburb of Stafford, in Brisbane, Australia, on May 5, 2018. AAP Image/Glenn Hunt

Essential care and service workers are facing a rental crisis in Australia as an analysis found that rent has risen to over one-third of workers’ weekly income in a majority of the country’s geographical regions.

Affordable housing campaign group, Everybody’s Home, cross-referenced SQM Research rent data with the basic hourly wage of workers in disability care, aged care, childcare, hospitality, and supermarkets.

The research (pdf) marked the start of the group’s national Homelessness Week campaign.

The figures reveal that the rent of an apartment in nine regions throughout New South Wales, Queensland and the ACT cost more than two-thirds of a working week’s income.

A further 78 regions around Australia had rents that cost over one-third of an essential worker’s weekly wage.

Everybody’s Home national spokesperson Kate Colvin said Australia’s critically important carers and service workers were being let down by the housing system and priced out of the communities they served.

“While eye-watering rents are worst in our major cities, essential workers are increasingly priced out of coastal and bush communities too,” Colvin said. “People with big city incomes are moving to the regions and totally warping the rental markets.”

A worker seen inside the Hardi Aged Care Nursing Home Facility at Summer Hill in Sydney, Australia, on Aug. 2, 2021. AAP Image/Joel Carrett

She called for an expansion in social and affordable housing to help give low and modest-income Australians more options.

“Expecting an exhausted aged care or supermarket worker to commute 90 minutes to and from work just to afford the rent is totally unfair and unsustainable,” Colvin said. “Australia can do better.”

The analysis lines up with an earlier report by the Australian Housing and Urban Research Institute (AHURI) that found many key workers in capital cities, especially in Sydney and Melbourne, would struggle to buy or rent a home on their level of incomes.

AHURI also suggested that the government should increase the supply of affordable housing for both rental and ownership tenures to support this sector of workers.

Property researcher CoreLogic found that rent experienced its highest annual growth rate in more than a decade over the June 2021 quarter, up 6.6 percent over June 2020.

Reflecting Colvin’s concern, CoreLogic found that regional rents (2.7 percent) outpaced city rents (1.9 percent) in growth across the quarter.

However, COVID-19 restrictions also negatively impacted the rents in Australia’s biggest cities due to their traditional reliance on international migrants. The rent of dwellings in the CBDs of Sydney declined by 1.1 percent, while Melbourne’s dropped 6.4 percent.

“It is interesting to note that, as with house prices, rent prices are seeing a deceleration in growth at the national level and across each of the capital cities,” CoreLogic Head of Research Australia Eliza Owen said on July 19. “This may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases.”

The rise in rent follows behind the housing market’s extraordinary growth in house values, which has seen median house prices skyrocket to over $1.4 million in Sydney and $1 million in Melbourne and Canberra.