Dan McKenna, CEO of Housing All Australians
Australia is now confronting a housing shortage that has moved well beyond a social policy concern. It has become a drag on national productivity, a handbrake on business growth, and a threat to the functioning of local economies across the country.
The latest Rental Affordability Index, produced by National Shelter, SGS Economics and Planning and Housing All Australians, paints a clear picture of how deeply this crisis has spread. In almost every city and regional centre, the workers Australians rely on every day – the people who staff cafés, support school classrooms, care for older people and keep early learning centres running – are being priced out of the communities they serve.
In the ACT, a couple earning the minimum wage must spend about 31% of their income just to keep a roof over their head. That places them squarely in housing stress. For hospitality workers, the picture is even starker, with rents swallowing 38% of their pay. Similar pressures are felt outside the national capital. In Sydney’s hospitality sector, average rents consume 42% of income, while minimum-wage earners in Brisbane, Adelaide, Perth and Sydney all face rent burdens between 32% and 38%.
When essential workers cannot afford to live locally, they pay the price through long commutes, fatigue and reduced productivity. Businesses pay too. Across the country, retailers, restaurants, health providers and service businesses are shortening trading hours, or contemplating relocation or closure because they can’t find staff. A major reason for this is that employees simply cannot find somewhere affordable to live nearby.
Across governments, there is now a clearer recognition that housing is essential economic infrastructure. We are beginning to see a shift in mindset.
The Commonwealth’s decision to bring housing into Treasury signals that affordability and supply are economic fundamentals. Rebalanced build-to-rent tax settings, the acceleration of home buyer programs, commitments to a Better Deal for Renters, and the forthcoming shared-equity scheme all reflect a growing understanding that housing policy is inseparable from workforce participation and business productivity. The next tranche of the Housing Australia Future Fund will also help increase supply at scale.
States and territories are taking action too. The ACT is again showing that policy reform makes a difference. While there is a long way to go, rental affordability has improved by 4% over the past year, helped by CPI-linked rent caps and sustained efforts to boost supply. Planning systems across several jurisdictions are now being reworked to remove long-standing bottlenecks that have slowed the delivery of new homes.
Governments understand the economic dividends of housing investment: better health outcomes, lower rates of family violence, reduced crime, improved educational results and higher labour market productivity. For every dollar governments invest, society receives more than two dollars in economic and social returns – a ratio that outperforms many traditional infrastructure projects.