The Housing Crisis Is Disrupting Australian Business

The housing crisis in Australia is hitting small and medium-sized businesses hard, becoming a top concern for business leaders in 2025. According to KPMG, housing affordability has jumped to the number one challenge facing organisations, surpassing digital transformation and compliance. This shift signals just how deeply the housing crisis is impacting Australian business, particularly in workforce recruitment and retention.

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How Housing Affordability Impacts Staff and Recruitment

The rising cost of housing in capital cities and regional hubs has made it nearly impossible for many workers to live close to their jobs. With limited access to remote or hybrid work in industries like trades, education, hospitality, and aged care, many employees are being pushed out of the labour market entirely or seeking work in more flexible fields.

This challenge is hitting small-to-medium-sized businesses (SMEs) particularly hard. Unlike large corporations that offer perks like relocation packages, loyalty bonuses, and extensive well-being programs, SMEs often can’t compete—leading to higher turnover, lower productivity, and greater recruitment costs.

Recruitment Costs Are Soaring

The cost of advertising a job has increased by 81%, now averaging $5,380 per role. Businesses also spend around 18 hours per hire on screening, testing, and interviews—only for 1 in 6 recruits to leave within six months. For many SMEs, these numbers are unsustainable.

When turnover is high, it affects more than just your budget—it drags down team morale and client satisfaction too. This is especially damaging in face-to-face industries where consistency and reliability are key.

How the Housing Crisis Interacts with Broader Business Pressures

The housing crisis facing Australian businesses is only one part of the bigger picture. Business owners must also contend with fast-moving digital innovation, cybersecurity threats, and shifting workplace expectations. But without a stable team, responding to those other pressures becomes far more difficult.

Actionable Strategies for SMEs

While you may not be able to solve the housing crisis, there are practical steps SMEs can take:

• Offer flexible work hours or hybrid models

• Collaborate with local councils to support housing initiatives

• Invest in professional development and mentorship

• Create roles for specific groups, such as career returners or older workers

• Boost satisfaction with wellness perks, childcare support, or travel subsidies

• Build local talent pipelines via internships or school partnerships

Planning Ahead During Uncertainty

The housing crisis in Australian business environments is real—but with proactive strategies, your SME can build the resilience it needs to weather the storm. Strategic workforce planning, creative recruitment, and long-term thinking will help protect your business in uncertain times.

Need expert advice? We can help you plan for workforce challenges and create tailored insurance strategies to protect your operations. Contact us today to learn how.

If you’d like to know more about protecting your business from housing-related workforce challenges CLICK HERE, or contact us today.