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  • Essential workers are being pushed to the edge of the city fringes due to a lack of affordable housing, a new report has found
  • Only two local government areas across greater Sydney and one in Melbourne have a median house price that is affordable to key workers on moderate incomes
  • The report found that the number of key workers living in inner-city regions fell between 2011 and 2016, suggesting key workers are moving away from inner-city areas to less expensive outer suburban areas and satellite cities
  • In Sydney more than 25,000 key workers are in mortgage stress and in excess of 26,000 in rental stress. For Melbourne, it was more than 21,000 in mortgage stress and over 16,000 in rental stress
  • The research findings provide another impetus for governments to address housing affordability, the researchers say

Essential workers are being pushed to the edge of the city fringes due to a lack of affordable housing, a new report has found.

Only two local government areas across greater Sydney and one in Melbourne have a median house price that is affordable to key workers on moderate incomes, according to new research led by Sydney’s School of Architecture, Design and Planning.

The research undertaken for the Australian Housing and Urban Research Institute (AHURI) found that the two affordable local government areas in Sydney are more than 150 kilometres from the CBD.

The situation is no better in Melbourne, with only the Golden Plains local government area (more than 80 kilometres from Melbourne CBD) having houses affordable to key workers.

A similar picture emerges in the rental market, with the research finding that in an indicative month only two per cent of new rental properties in Greater Sydney had rents that were affordable for key worker households earning $790 per week. Just five per cent were affordable to households earning $960 and 11 per cent were affordable to those with an income of $1,150.

The report found that the number of key workers living in inner-city areas fell between 2011 and 2016, while outer suburbs as well as satellite cities Wollongong, Newcastle and Geelong gained key worker residents.

“There is significant movement away from inner-city areas among key workers aged 30–44 whose moves may be driven by factors like starting a family or a desire to buy a home rather than rent,” lead research Dr Catherine Gilbert, Postdoctoral Research Associate from the School of Architecture, Design and Planning said.

In addition, more than 52,000 key workers in Sydney and over 37,000 in Melbourne are living in households that are in housing stress, that is households which are paying rents or mortgages that are in excess of 30 per cent of their household income.

The breakdown for Sydney was more than 25,000 key workers in mortgage stress and over 26,000 in rental stress. For Melbourne, it was over 21,000 in mortgage stress and over 16,000 in rental stress.

The term key worker usually refers to employees who work in services that are critical to the operation of a city yet earn low to moderate wages.

Interviewees in the research also explained that affordability was not the only barrier. They also reported challenges in finding appropriate accommodation near their work due to the related issues of competition in the rental market and limited timeframes to secure a home.

The research findings provide another impetus for governments to address housing affordability, as failure to do so could impact the safety and functioning of our cities into the future,” Dr Gilbert said.

“Measures to assist key workers to access home ownership, policies and programs to increase the supply of secure, long-term rental housing and affordable housing tenures targeted at moderate income workers could all play a role in addressing the risk.”

The report also proposed non-housing based support mechanisms such as transportation subsidies or income supplements for essential workers experiencing housing stress.

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