Essential workers are spending about two thirds of their income on housing on average as the housing affordability crisis prices them out of their communities and exacerbates staff shortages across Australia.
New analysis has found early childhood educators, aged care workers and cleaners are among the hardest hit as they are being forced to spend more than three quarters of their income on average on renting a place to live.
The coalition of welfare and housing advocacy organisations behind the “Everybody’s Home” campaign has released a new paper comparing data on rents against the full-time award wages of people in 15 essential worker categories who are living alone.
The “Priced Out” report says essential workers have lost an average of six hours from their weekly income to rent increases, which works out to a loss of 37 days’ pay each year — since before the pandemic.
Typical unit rents across the country have increased by 31 per cent over the past three years from $372 per week in March 2020 to $489 in March 2023.
People on the lowest award rates are now being left with only around $20 a day after paying rent, based on the capital city average, according to the report.
Everybody’s Home, which released the study to bolster its calls for the federal government to ramp up in investment in social and affordable housing, says rising rents means essential workers are likely to be in serious financial stress or relying on their partner’s income.
Furthermore, the rental crisis means many essential workers can’t afford to move to parts of the country that are most in need of staff while others, such as those in aged care are leaving the profession altogether in favour of higher paid work.
Here’s what the report found across the country:
NSW
Sydney continues to be Australia’s most expensive capital city, with average rents for an unit taking up double the income of even the most highly-paid essential workers; paramedics, firefighters and school teachers.
Others can expect to be spending almost all their income on rent with very little left over to meet other essential costs.
In looking at the results across NSW more broadly, there are no regions where rentals are affordable for any essential worker on award wages.
In every region across the state, an essential worker paying a typical rent would be in rental stress.
Affordability is particularly poor in coastal areas where many highly paid professionals have been able to relocate and work from home, and for commuter areas with transport links to Sydney.
Tamworth has the most affordable unit rent rate of any region in NSW but its current rental vacancy rate is just 1.4 per cent, suggesting competition for rentals within an essential worker’s budget could be fierce.
Victoria
Again, there are no affordable regions for any of the essential workers profiled — which also include construction workers, freight drivers, meat packers and nurses.
Melbourne has the least affordable rents in the state, consistent with trends across other jurisdictions, with essential workers in the Victorian capital likely to be experiencing severe rental stress.
All essential workers would be spending at least half of their income on rent with many spending anywhere between two thirds and three quarters of their income on housing.
Housing availability is a major issue in Gippsland in the state’s east, with Anglicare — one of the groups behind the Everybody’s Home campaign — reporting difficulties in the availability of rental properties.
Anglicare Victoria workers have said that there are many people living in hotels waiting for secure long-term accommodation in the region.
The lack of affordable housing is badly affecting employers’ ability to hire some staff in some places.
For example, not-for-profit aged care provider Benetas says it has been facing serious difficulties in attracting staff in regional Victoria for years.
“At the moment, we have a number of employees wanting to work at our St Laurence Court Eaglehawk home in Bendigo but are finding it extremely difficult to find affordable places to rent, or are having to commute every day from Melbourne,” Benetas chief executive Sandra Hills told the Priced Out report.
“Many of our carers want to work part time due to other commitments such as caring for family members or raising children.
“But with the challenges of rental affordability, particularly in regional areas, we are struggling to attract and keep really good carers in our aged care homes.
Western Australia
Rental affordability for essential workers is consistently poor across the five regions of Western Australia considered by the report; Perth, Central Coast WA, Goldfields, Northern WA and South West WA.
Northern WA — which includes the mining hubs in the Pilbara — is easily the least affordable region across the state, outstripping Perth and far surpassing the national average result.
The report says the rental struggle in Northern WA provides a snapshot of the difficulties facing essential workers and other low and middle income earners when they have to compete for properties in a market with very high income earners.
The mining industry is a major employer with highly paid industry workers skewing the rental market for others in this part of WA, the report found.
Essential workers renting on WA’s central coast — which includes regional centres such as Carnarvon and Geraldton — are faring a little better than those in other parts of the state.
South Australia
Despite South Australia’s status as the most affordable state in the Priced Out study, Adelaide remains a very unaffordable rental market for essential workers in line with other capital cities.
Most essential workers profiled by the report would find themselves spending at least half of their weekly income on rent in Adelaide.
The only region in this entire report where rents could be regarded as affordable for essential workers is Kangaroo Island.
However it is important to note that Kangaroo Island is unlikely to offer job prospects for the workers we have profiled given its size, and in any case, its rental vacancy rate is extremely low at 0.2 per cent.
All other regions in South Australia would either see essential workers in rental stress or on the cusp of it.
Queensland
Queensland has become one of the least affordable states for renters, with affordability for essential workers particularly low.
The highest paid essential workers are having to spend at least half of their incomes on rent while the lowest paid, such as hospitality workers, are paying about three-quarters of their wages on housing.
The Gold Coast easily ranks as the least affordable region for essential workers anywhere in the country, outstripping every capital city including Sydney.
Even workers on the most generous awards analysed by the report would still be forced to pay more than three quarters of their income on a typical Gold Coast rental.
Freight divers, meat packers and aged care workers would be among the essential workers simply unable to afford a property on a single income on the Gold Coast because their wages have been outstripped by rental prices.
These essential workers would either be forced into permanent share housing or to live in other parts of the state with a long commute.
St Vincent’s Care is just one organisation that says it has been struggling to find the essential workers it needs because of climbing rents in Queensland, particularly on the Sunshine Coast.
St Vincent’s Care Services chief executive Lincoln Hopper told the Priced Out report the organisation was having to fill up to 242 shifts a fortnight with temporary and other staff because of a lack of available locals to fill permanent roles and plug the gaps.
“Housing affordability is undoubtedly a major factor in our struggle to fill these positions. People can’t work in the region if they can’t afford a place to live,” Mr Hopper said.
“A lot of people don’t understand the multiplying effect the housing crisis has. This crisis not only hurts individuals who can’t find a place to live, but it also hurts the people who need their support; it hurts the local towns and communities that miss out on their contribution.”
Tasmania
Tasmania has become home to one of Australia’s most unaffordable rental markets.
As is typical of all capital cities, all 15 types of essential worker profiled in the Priced Out report would be experiencing rental stress in Hobart.
Rents are out of reach in all of Tasmania’s five regions — Hobart, Burnie, East Coast, Launceston and West Coast — for all essential workers.
The report notes that average incomes in Tasmania are the lowest of any Australian state or territory, suggesting demand and competition for affordable rentals is likely to be fiercer on the Apple Isle than on the mainland.
Northern Territory
Rents across the Northern Territory are unaffordable for all the essential workers profiled in the study.
The report notes there are also several unique factors across the NT which together make rental unaffordability worse.
Darwin has a high proportion of skilled professional workers on high incomes skewing average rental prices upwards.
But rural, regional, and remote parts of the NT have much lower incomes, high rates of disadvantage, and competition for rentals at the affordable end of the market.
The report claims there has also been “systematic underinvestment” in social housing in the state.
Combined, the report says these factors have culminated in major issues with remote housing, a social housing shortfall, and issues with overcrowding in homes.
ACT
Canberra’s rental affordability problem for essential workers far outstrips the national average results.
Canberra has some of Australia’s highest income earners, driving up rents and adding to unaffordability for the essential workers profiled in the Everybody’s Home report.
Many essential workers in lower paid sectors such as aged care and childcare could be forced to live in surrounding regions in NSW and commute into Canberra, the report says.
Every category of essential worker is spending more than half of their salary on rent in Canberra, with many workers spending more than three quarters of their wages on a place to live.
Everybody’s Home spokeswoman Maiy Azize said virtually no region in Australia was affordable for aged care workers, early childhood carers, cleaners, nurses and many other essential workers Australians rely on.
“So many essential industries are facing workforce shortages with workers unable to afford to stay or move to parts of the country where these shortages are at their worst,” she said.
“Our tax system is rigged against renters, driving up the cost of rent for millions of Australians. And on top of that, Australia has a huge shortfall of social homes for people who can’t afford rent.”
Everybody’s Home is reiterating its demand that the government commit to building 25,000 social homes every year to end the shortfall and fund their construction by winding back tax concessions for property owners.
Welfare support groups have long argued Australia’s unusually generous tax concessions for investment in rental properties unfairly benefit wealthy people and drives up the price of housing.
But previous plans to change these tax benefits have proved politically dicey, given both major parties fear losing the support of multiple property owning voters who might swing between the Coalition and Labor.
Parliament is expected to debate Labor’s centrepiece housing policy — the Housing Australia Future Fund — when it returns next month.
But the legislation isn’t guaranteed to pass given the Coalition won’t support the government’s co-investment vehicle and the Greens argue it doesn’t go far enough.