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11
Apr

The Housing Crisis is Hitting Australian Business Hard

Australia’s housing crisis has emerged as the priority social issue worrying business leaders in 2025.According to KPMG, housing affordability has risen from fifth to first place in its list of critical challenges. That means it’s more of an issue than digital transformation and regulatory compliance.

The impact on workforce availability and retention is clear, as businesses face difficulties attracting and keeping skilled employees who can no longer afford to live near their workplaces.

As well, KPMG’s surveyed business leaders noted that this societal issue can harm individual companies’ financial performance.

How Housing Affordability Impacts the Workforce

For many workers, rising housing costs prevent them from living close to work, especially in capital cities and regional hubs. This becomes problematic when hybrid or remote work options are unavailable. Lengthy commutes, rising living costs, and scarce remote work options are driving skilled employees to reconsider their roles or seek opportunities elsewhere. Housing stress can also significantly impact staff morale.

A domino effect is evident, with childcare centres struggling to find staff, limiting their capacity to offer more places for working parents. The significant and widespread crisis in childcare places continues across the country.

Childcare is just one of many industries grappling with compounded recruitment challenges. Small-to-medium enterprises (SMEs) face even greater disadvantages. Larger organisations often offset these issues with more resources to offer perks, such as:

  • Relocation packages.
  • Higher salaries.
  • Sign-on bonuses and loyalty bonuses for service (e.g., every six to 12 months).
  • Comprehensive well-being programmes.
  • Advanced technology tools and AI integration, and
  • Robust professional development initiatives.

Chances are your cashflow falls short of matching these lures.

How it Affects Small to Medium Sized Businesses

The housing crisis is also reshaping small business operations. High employee turnover, driven by housing-related pressures, disrupts operations and increases costs. Productivity often declines as businesses spend considerable time recruiting, onboarding new staff, and absorbing the sunk costs of training employees who leave prematurely. Overstretched teams can also decrease
customer satisfaction.

Consider this: in the past year, the average cost to advertise a role has risen by 81% to $5,380 across all industries, says Employment Hero. On top of that, businesses spend an average of 18 hours interviewing, screening, and testing candidates. Then, one in six recruits either leaves or is asked to leave within their first six months.

These problems are particularly pronounced in industries reliant on face-to-face services, including hospitality, trades, healthcare, wellness, education, childcare, fitness, tourism, professional services, pet care, and arts and entertainment, where remote work isn’t feasible. Your SME’s growth plans may stall as you divert resources to managing immediate workforce concerns.

Housing affordability and Broader Business Challenges

The housing crisis is just one piece of the puzzle for Australian businesses. It intersects with challenges like digital transformation, cybersecurity threats, and navigating complex regulatory frameworks.

How can your SME adapt and plan effectively in this environment?

Tackling the strain of housing affordability on your workforce can better equip your business to handle these interconnected challenges. Building resilience now lays a strong foundation for safeguarding your operations in an unpredictable environment.

Strategies for Success During the Crisis

Earlier, we outlined some of the perks larger businesses use to attract talent. Here are some strategies that might suit your SME:

  • Offering flexible work arrangements, including hybrid, remote, or staggered shifts.
  • Collaborating with local housing initiatives.
  • Exploring co-investment opportunities to support affordable housing projects (for the long run).
  • Promoting career growth with professional development, mentorship or subsidised qualifications customised to employee goals.
  • Strengthening community ties, such as with local schools, TAFEs and universities to create internship or apprenticeship pipelines.
  • Providing extra leave days, wellness programs, subsidised childcare, or paid volunteering opportunities to boost employee satisfaction.
  • Fostering an inclusive and supportive workplace culture.
  • Designing roles for specific demographics, such as returning-to-work parents, older workers, or career changers, and
  • Exploring alternative incentives like meal allowances, travel subsidies, or gym memberships to attract and retain talent.

Strategic planning is key. Evaluating the risks that housing affordability poses and preparing scenarios to adapt can help your business stay ahead.

Protecting Your Business During Housing Uncertainty

As a business owner, you’re already balancing multiple challenges—from economic fluctuations to industry-specific risks. The housing crisis is another factor to consider.

We can assist you in preparing your business for uncertainties such as workforce shortages or operational disruptions. A customised insurance solution offers a safety net during these turbulent times. Contact us to discuss how we can strengthen your SME’s resilience against housing-related pressures.

 

Article Supplied by OneAffiniti

Photo by jhorrocks

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