How is the housing crisis affecting the job market in Australia?
Essential businesses and services also face a lack of affordable housing in the country. Rising living costs are forcing employees to move out of big cities, and companies may be facing layoffs.
Essential businesses and services also face a lack of affordable housing in the country. Rising living costs are forcing employees to move out of big cities, and companies may be facing layoffs.
One of the most debated topics in the Australian economy is the country’s severe housing shortage relative to its current population, resulting in sky-high rents and property prices. While many blame migration for this inflation, the construction industry is one of the sectors struggling to keep up with the growing demand due to a shortage of workers, which often relies heavily on migrant workers.
While the government since 2024, has introduced measures to restrict student visa pathways and reduce the number of international students in the country, on the other hand, there is an aim to potentially increase opportunities for skilled workers on work visas.
Summary of the housing crisis in Australia
Australia’s housing crisis didn’t start suddenly – the sector has been building for over a decade, but it has only gotten worse since 2020. During COVID-19, many migrants were forced to leave the country, significantly reducing the workforce in essential sectors and government and private investments in certain areas, as construction was temporarily suspended.
With many properties left empty by the migrant diaspora and city dwellers, emergency rent protections and low interest rates have temporarily eased price pressures.
In 2021-22, the economy began to recover, urban centres and education systems resumed operations, and people began returning to major states, along with the reopening of the country’s borders to students and migrant workers returning to school or newcomers to the country.
However, rents soared as vacancy rates declined and construction slowed.
This inverted graph, with population growth and reductions in essential services including construction, agriculture, health and community services, led to inflation in 2023-2024.
Record net migration (over 650,000 in two years) without an equivalent housing supply exacerbated the imbalance. Financial institutions raised interest rates, making it harder to pay mortgages, and pushing more people into the rental market, where competition became fierce.
In 2025, despite the government's target to build 1.2 million new well-located homes over 5 years, starting from mid-2024, challenges remain great to achieve such an ambitious goal.
How is the housing crisis affecting the job market in Australia?
Businesses and services struggle to retain employees due to a lack of housing affordability, as the public concern and political debate around migration, zoning and housing investment continue to grow.
For many workers, high housing costs mean long commutes and the complete inability to live close to work. Long commutes lead to a poor quality of life and long-term health impacts, especially for those with families.
Professor of Economics and Director of the Australian Institute for Business and Economics at the University of Queensland (UQ), Flavio Menezes, explains that “The housing crisis also limits worker mobility, as people may be reluctant to move to areas with better job opportunities. This contributes to labour market mismatches, where jobs go unfilled in some regions while unemployment persists in others”, says Economist Flavio.
How does it influence companies when hiring international workers?
The launch of the Australian Financial Review’s annual Chanticleer CEO Poll highlights that Australia, above all, is passing through a productivity crisis. The housing situation is the side effect of a broader scenario where many sectors lack productivity in the country.
According to Lendlease chief executive Tony Lombardo, chief of one of the country’s biggest developers and construction groups, said to Financial Review, “To meet the government’s housing targets and infrastructure pipeline, we need to increase skilled migration while also investing in training for young people.”
Mr Menezes remembers that the housing crisis increases the cost for comapnies to attract and retain international talent, particularly in major metropolitan areas such as Sydney and Melbourne. “International workers often face challenges finding suitable housing upon arrival, which can lead to delays to start the working process, and it should also be considered by companies.”
What are the opportunities for business and skilled international workers?
However, despite the current situation, experts emphasize the need in investing on bringing skilled workers to Australia, to fulfil the country’s needs. “There are many advantages to working in Australia, including strong demand for workers in healthcare, engineering, and IT. Except for COVID-19, we haven’t had a recession since I arrived in Australia over 30 years ago”, says Professor Menezes.
A particular challenge for international skilled workers instead, is that experience and qualifications, especially from non-English speaking countries, are not always fully recognized. In such cases, the candidate or the companies may choose to pursue additional qualifications in loco.
To facilitate the legal processes of hiring international professionals, and for more updates on visa policies and skilled migration opportunities, contact a Seven Corp specialist for a free consultation.
Email employer@sevencorpcom.au
Phone number: 1300 157 707
