Up until 2001 there was little direct evidence that housing affordability problems were heightening labour shortages, as low-income jobs moved to low cost suburbs, and those jobs in the inner city - such as hospitality or retail jobs - were filled by young people who were more likely to share housing costs in group households.

KEY POINTS

• Until 2001 there is little direct evidence to suggest that skill shortages in Australia stem from housing affordability problems. Employers in high housing cost inner city areas were generally able to attract workers even though housing costs nearby were high. City core employers increased their workforces between 1996 and 2001 by importing from the suburbs as well as employing increased numbers of workers resident within the city.

• There is evidence that housing affordability problems – defined to be where a household spends more than 30 per cent of its income on housing costs – were prevalent for low-income occupations such as hospitality workers and sales assistants. Public sector ‘key worker’ occupations such as teachers and police officers were less likely to experience such problems.

• Housing affordability problems partly reflect a households’ low income, which is related to the principle earner’s occupation. They are also due to location: low-income workers facing the worst affordability outcomes, such as those in hospitality, were more likely to work and live in expensive inner city areas.

• Low-income jobs were moving to the suburbs where housing costs were lower than the inner city, reducing the potential for housing affordability problems for other low paid occupations. Others who were reliant on CBD employment – such as cleaners – evaded poor affordability by commuting. Nevertheless, with the exception of some groups – such as computing professionals in Sydney who were increasingly commuting – metropolitan workers were increasingly living close to their place of work.