Australia’s housing crisis is affecting much more than people’s ability to find a home, and the problem is burning a huge hole in our economy.
Millions of Australians are feeling the impact of the worsening crisis, with skyrocketing rental prices and unavailability, meaning many residents are now facing homelessness for the first time in their lives.
Now, the spillover effects of the situation are really starting to be felt, particularly in regional areas, with employers struggling to attract staff due to a lack of affordable housing for potential employees.
A special Impact Economics analysis of five regional economies commissioned by Everybody’s Home has shed light on the connection between rising rents, low vacancy rates and job vacancies.
The study looked at homes on the Queensland Sunshine Coast, NSW South Coast, Launceston-North East Tasmania, SA Fleurieu Peninsula and the Geelong/Surf Coast in Victoria.
The results found that the shortage of affordable housing in these areas alone is driving a $2.6 billion hole in local economies by directly undermining employers’ ability to attract staff.
Kate Colvin, national spokesperson for the Everybody’s Home campaign, said the chronic lack of affordable housing in regional communities is “more than a social crisis,” calling it a “profound economic crisis” as well.
“The inability to find a rental and eye-popping rent increases for the few available spots are deterring people from taking jobs in regional communities,” he said.
“Employers constantly tell us that prospective employees tell them they can’t move to the community if they can’t find a place to live.
“Our completely unbalanced housing system is stifling the economic potential of the Australian region.”
Let’s take a look at the staggering economic impact this crisis is having on our regional communities.
The Sunshine Coast has seen a 36 percent increase in median rental prices since March 2020.
The study found that 39 percent of low-income households are experiencing serious rental problems, which represents a 15-point increase from March 2020.
In that time, the number of job vacancies increased from 1,415 to 3,678, resulting in a loss of economic output of $786 million per year.
Taking a look at the Geelong/Surf Coast area of Victoria, there has been a 17% increase in rental prices since March 2020, with the number of households experiencing rental stress rising by five points to 26% in that same period.
The number of vacant positions has increased by a whopping 133 percent from 1,454 to 3,401.
This means that the economic output lost due to job vacancies amounts to $760 million a year.
In New South Wales, the Illawarra/South Coast region has seen a whopping 41.7% increase in rental prices, with the number of low-income households experiencing serious rental problems rising 20 points to 46% .
As a result, the region is experiencing an economic output loss of $642 million after the number of job vacancies increased from 2,848 to 1,333 since March 2020.
The number of houses available for each job has dropped significantly in regional areas and is often well below major capital cities.
For example, in Geelong and the Surf Coast there is only one house for every ten jobs, compared to one house for every six jobs in Melbourne.
In Illawarra and the south coast, there is one house for every eight jobs, compared to one house for every five jobs in Sydney.
Those living on the Fleurieu Peninsula in South Australia have seen a 48% rise in rental prices, along with a 20-point rise to 38% of low-income households facing a great rent stress.
There has been a 119 percent increase in job openings since March 2020, jumping from 426 to 932, resulting in an economic loss of $201 million each year.
In Launceston/North East Tasmania, there has been a 21% increase in rental prices and a seven point increase in rental stress, meaning that 36% of low-income households are now experiencing severe stress for rent.
Since March 2020, the number of job vacancies has increased from 382 to 876, resulting in an economic output loss due to job vacancies of $201 million per year.
The new data was released ahead of the upcoming jobs and skills summit, where employers will meet with the government and unions to discuss solutions to stagnant wages, job security and skills shortages.
Ms. Colvin said that the connection between housing and employment should be “at the top” of the summit’s agenda.
“The expansion of affordable and social housing by building an additional 25,000 new homes per year would provide more options for people with modest incomes,” he said.
Ms Colvin said such a move would relieve pressure on Australia’s housing system, allowing regional communities the chance to “flourish economically”.
“We need a better balanced housing system that supports social inclusion and fosters economic growth,” he said.
“The housing needs of Australian workers deserve serious attention at the jobs summit.”
Anthony Albanese’s labor summit follows in the footsteps of the Hawke government’s economic summit in 1983 and Kevin Rudd’s Australia 2020 summit held in 2008.
Mr. Rudd’s summit brought together 1,000 of the “best and brightest” to map out solutions to challenges in jobs, the environment, the arts and health.
But suggestions that the summit could be reduced to a festival of talks, as some have claimed the Rudd summit was, were quickly rebuked by the Prime Minister.
“The Rudd 2020 summit was the first time anyone had heard of the National Disability Insurance Scheme; quite a significant reform that came out of that process,” responded Mr. Albanese.
“I already consider (the summit) a success.
“The fact that all of you are here and we’re talking about jobs and skills is part of the process of what we’re doing here: making sure people understand that there is a significant skills shortage.”