A report from AHURI has revealed that key workers can no longer afford to live in Sydney or Melbourne as a result of the high cost of housing.
Only two of Greater Sydney’s local government areas were found to be affordable for the average essential worker, and they were both over 150km from the CBD. In Melbourne, the situation was little better: the only area that was within budget was Golden Plains, 80km from the city centre.
“What we did was look at what key workers are and then what has been done to help them to live close to where they work, both in Australia, and in the UK and the US,” said Dr Catherine Gilbert of the University of Sydney, who authored the study. “The main empirical part of our work was looking at whether key workers in Sydney and Melbourne can afford housing, and what their responses were.”
“What we found is that there is definitely evidence that key workers are struggling to afford housing. We see that in quite high levels of housing stress: 20% of key workers in Sydney are in households that are paying unaffordable mortgages or rents.”
“We also found incidences of overcrowding are quite prevalent among key workers and that inner subregions are losing key workers residents compared to places on the periphery and satellite cities like Wollongong and Geelong. Key workers appear to be moving outwards.”
The study was drawn from 2016 census data, which predates the pandemic and the tree changer effect that has driven prices up even on the outskirts of Sydney and Melbourne.
Geelong and the Illawarra have some of the fastest growing property prices in Australia, and so may not now be as affordable to key workers as they were when the study was taken.
Key workers are more likely to commute more than 30kms to their job, which makes active government intervention to assist vital workers essential. Dr Gilbert and the study authors had some suggestions.
“Providing affordable housing close to where key workers work is really essential, and to make that housing appealing, there needs to be the opportunity to become a homeowner close to where you work,” she said. “What we’re seeing is that people who are in that 30-44 age cohort, which is the age at which people look to buy a home, they’re the largest group that are moving out. To retain those people in expensive housing areas there needs to be affordable homeownership opportunities.”
“We found examples of demand-side support from the US and UK where they provide equity loans and assisted down payment for workers in key occupations. There’s also supply side programmes, like incentives for developers to build workforce housing. In our report, we’ve outlined a few things that governments in New South Wales and Victoria could potentially do: a government shared ownership program could help with retention, and we’ve also suggested inclusionary zoning in health and education precincts to try to deliver more affordable housing for key workers in those locations.”
