Melbourne’s expensive rental market prices out the essential workers keeping the city running
Melbourne’s essential workers who have kept the city going during the coronavirus crisis cannot afford to pay rent anywhere without finding themselves in serious rental stress, a new analysis of data shows.
Not one suburb across the entire state would be considered affordable for essential workers like supermarket staff, commercial cleaners and chemist shop assistants, a comparison of the latest median salary data from the Australian Tax Office and Domain rental data shows.
Those on less than $30,000 a year, including check-out operators – who earn a median wage of $23,319 – have just $135 per week to spend on rent without falling into rental stress. A household is considered to be in rental stress when more than 30 per cent of its gross income is committed to rent payments, according to the Australian Bureau of Statistics.
The cheapest rent in Victoria, in Newborough in the Latrobe Valley, almost two hours out of Melbourne, costs $188 per week for a unit. That would take almost half – 42 per cent – of a check-out operator’s weekly salary.
Aged-care nurses earn $46,812 a year, which leaves them just $270 per week to spend on rent. For that price, the only suburbs affordable are in regional Victoria, like Morwell in Gippsland or Numurkah, which is 37 kilometres north of Shepparton – the town more recently hard hit by COVID-19.
Even for dual-income essential worker households, much of the market is out of reach. A factory process worker and a delivery driver, earning a combined $76,440 annually, would have $441 per week to spend on rent. That would get a house in outer suburbs like Scoresby and Ringwood, or a small unit closer to the city in Balwyn, the analysis showed.
Unaffordable housing is a problem facing essential workers in all capital cities, with figures from the Australian Institute of Health and Welfare revealing more than 1.5 million Australians were paying more than 30 per cent of their income on rent. Melbourne’s median house rent now sits at $430 per week.
Many workers were sharing houses or living in overcrowded homes, which put them at higher risk of COVID-19, the national spokesperson for Everybody’s Home, Kate Colvin, said.
“In the context of the pandemic, that’s where we have higher infection rates in Melbourne – the north and western suburbs – because that’s where lower-paid workers live,” Ms Colvin said. “They are living in situations where they are sharing with other essential workers [to afford to pay the rent] and often with multiple children.”
While the outer suburbs of Melbourne appeared more affordable for renters, for many working in essential jobs the added costs associated with living so far out meant they were not, she said.
“They’re often not affordable because of the costs of transport and the pressure on families from long commute times,” Ms Colvin said.
More investment was needed in social and affordable housing, Ms Colvin said.
“We need to address the problem in the housing market because housing is so expensive, even for people who are working,” she said.
Grattan Institute economist Brendan Coates said it was a “vicious cycle” for essential workers on low wages who often worked in jobs that could not be done from home.
“It’s why the [COVID-19] outbreaks in, say, western Sydney or the northern suburbs of Melbourne are so hard to stamp out,” Mr Coates said.
Those in wealthy neighbourhoods were more likely to be able to work from home and live in larger houses, or with fewer people, making it easier to isolate and stop the spread, he said.
Mr Coates said increasing the supply of housing, particularly in middle and inner-ring suburbs, was key to improving housing affordability, while increasing wages for essential workers and government rental assistance was also needed.
Tenants Victoria director of community engagement Farah Farouque said essential workers needed access to affordable housing close to their jobs, public transport, schools and childcare.
“We’ve seen how important essential workers are for the functioning of our cities, suburbs and regions through the lens of the pandemic,” Ms Farouque said.
“We know rental overcrowding can … be a significant challenge for people on lower incomes as well as they try to minimise their housing costs,” she said. “During the course of the pandemic, we’ve heard stories of the challenges faced by some share house residents when trying to follow public health directives to self-isolate due to COVID-19 exposures.
“On so many fronts, the pandemic has reinforced the key fact that a safe, secure and affordable home is essential for renters’ personal and public safety,” she said.
Ref: MELISSA HEAGNEY | SENIOR JOURNALIST (on 09 Sep 2021). Melbourne’s expensive rental market prices out the essential workers keeping the city running. Retrieved from https://www.domain.com.au/news/essential-workers-priced-out-of-melbournes-expensive-rental-market-1086616/.
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