Victoria’s proposal to provide employees a right to work from home two days a week has reignited a national debate. In response, Western Australia’s Premier Roger Cook said he had no intention of mandating work from home, adding: “We know that in Victoria, there’s a much bigger culture in relation to working from home because that was a fact of their life during COVID.” So, is Premier Cook right? Did the COVID-19 lockdowns cause a shift in attitudes towards working from home?
A new paper by Laura Ketter, Todd Morris and Lizi Yu may have the answer. Using the Household, Income and Labour Dynamics in Australia Survey, the authors compare office workers across cities that experienced the most prolonged lockdowns – those in Victoria, New South Wales and the Australian Capital Territory – with their counterparts in other states from 2002 to 2023.
During 2020 to 2021, the initial jump in work from home was significantly larger in the most locked down jurisdictions. By 2022 to 2023, workers in these most affected states were still working from home roughly 0.5 additional days per week – about 43 per cent higher than comparable workers in other states. And states with longer lockdowns exhibit more persistent increases in work from home – for instance, Victoria’s rates of working from home remain higher than New South Wales.
What is driving the relationship between work from home persistence and lockdown intensity?
The authors outline different adjustments made by firms and workers in response to the COVID-19 lockdowns. In 2024, Melbourne, Sydney and Canberra CBD office vacancy rates were more than three times their 2019 levels, consistent with firms using less office space under hybrid work. The sharpest increase was in Melbourne, where vacancy rates have quadrupled since 2019. In other capitals, vacancies also rose during the pandemic but by much less and have begun to ease as onsite work has recovered.
On the employer side, similar trends are visible: the share of office job advertisements explicitly offering work from home or hybrid roles remains above pre-pandemic levels, with larger increases in the heavily locked down states. Formal work from home agreements have also become more common after the pandemic in these states.
On the worker side, adjustments were largest where lockdowns were longest: more people moved home, and those that did so moved further from the CBD. Among movers, homeowners drove the outward shift, relocating on average about 60 kilometres further out in 2022 to 2023. These patterns are consistent with lower effective commuting costs under hybrid work. This is consistent with previous e61 work showing persistent rises in rental prices in the urban fringes of capital cities post pandemic.
Taken together, these adjustments raise the cost for both firms and workers of reverting to daily in-office attendance. As a result, post-COVID declines in work from home have been smaller in the most locked-down states.
Why does this matter for Victoria’s work from home proposal?
Premier Cook is right – this new research shows that work from home has been more persistent in the states most affected by lockdowns. But at the same time, the overall prevalence of work from home is gradually declining from its COVID peak, including in Victoria. Together, these patterns suggest firms and workers are still optimising where and how they work.
In that context, governments may need to be cautious about locking in a fixed number of work from home days. Things are still playing out. Keeping the system flexible will help ensure the evolving needs of workers and firms are met.
