UNOCCUPIED

We know that the number and proportion of unoccupied homes across Australia is increasing.  The latest national count found that 11.2% – or about one million – of our private dwellings were empty at this time last year.

Now, I need to bore you for a few moments with some stats.

The 2016 Census identified approximately nine million private dwellings in Australia on census night, of which 8,286,000 (88.8%) were identified as occupied and 1,040,000 (11.2 %) were unoccupied.  In the 2011 Census, 7,760,000 dwellings (89.3 %) were recorded as occupied and 934,500 (10.7%) unoccupied.

This represents an increase of 632,250 in total private dwellings since the 2011 Census, and an increase of 105,500 in unoccupied dwellings, which equates to 17% (or approximately one in six) new dwellings between 2011 and 2016 being unoccupied.

Let me repeat that – one in six of our new dwellings is unoccupied. 

Now, the Bureau used to – as part of the census – ask why a dwelling was empty during the night of the census.  It’s true that the highest levels of vacancy are often in coastal areas – or in areas where occupation during winter is not much fun (the census in recent decades has been conducted in early August) – plus, also in resource based towns/regions.  So, when we undertake our national count has some impact.

But housing vacancy in capital cities is also a growing trend, especially in locations associated with medium density housing and in particular, high-rise apartments.  There have been several studies in recent years, illustrating such.

And when you look at past ABS results about why a dwelling is vacant, they found:

  • Resident is usually absent    50%
  • Holiday accommodation       20%
  • For sale or rent                     20%
  • Repairs/alternations             10%

So, it is a somewhat safe bet to say that at least half of the dwellings unoccupied are deliberately locked up.

The Commonwealth and Victorian governments have now announced plans to tax vacant properties.  The Victorian government’s Vacant Residential Property Tax, which will come into force next year, will impose a levy on properties that are vacant for more than six months in a year.

The federal tax differs in that it only applies to foreign owners, with a $5,000 charge to properties that are vacant for more than six months.

The increase in vacant dwellings is also a global trend.

The value of housing is no longer based on its social use.  Housing, in many western countries, has become a financial vehicle, and in markets where capital gains outweigh rental returns, homes are increasingly left vacant.

I have two comments:

Firstly, we are not undersupplied with housing.  There is plenty of spare capacity – which leads me to my second thought:

The development industry keeps advocating that increasing new housing supply will alleviate housing affordability problems.

However, whilst housing supply has technically kept pace with population growth in Australia in recent years, most new housing development occurs disproportionately in “mid-to-high” priced segments, locking out many – and not only first home buyers.  Plus, it doesn’t help when a high and growing proportion of our new digs is locked up by speculators.

Keen to hear your thoughts.

Until next time,

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Michael Matusik

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