More than a million homes were left empty when census took place in August last year, calling into question whether or not property investors are sitting on empty properties and making it harder for young buyers to break into the market.
But these fears seem to be unfounded with a recent analysis suggesting that there hasn’t been a significant increase in landlords keeping their properties vacant.
Economist Terry Rawnsley, of SGS Economics & Planning, highlighted that despite people’s concerns over the 11.2 per cent of dwellings reported as unoccupied on census night there “does not appear to be a large pool of dwellings withheld from the housing market”.
Reasons why properties were vacant
Rawnsley pointed to a number of “valid reasons” for the unoccupied homes, including newly constructed properties yet to be occupied, properties for sale or under offer, properties in the process of being renovated, deceased estates or the property being between tenancies.
Another reason why so many homes were empty on census night is because many people were simply not at home on that particular night.
It’s also important for people to keep in mind that the 11.2 per cent of unoccupied dwellings recorded in 2016 isn’t a significant result, being only 0.5 percentage points higher than the 2011 census.
Over the past 35 years unoccupied dwellings have consistently made up around 10 per cent of dwellings in Australia.
“With the 2016 census being broadly in line with historical levels we can’t blame investors intentionally leaving homes vacant or the rise of Airbnb,” said Rawnsley.
Some have suggested raising taxes as a penalty for those who leave their properties vacant, however Mr Rawnsley predicts that while this may lead to more properties entering the market, “these numbers would suggest that it would only be a very, very small percentage of unoccupied dwellings”.
Below are some of the reasons why homes were empty on census night:
Source: SGS Economics and Planning
More unoccupied dwellings in the country compared to cities
The analysis also found that capital cities, where most Australians live, had the lowest level of unoccupied dwellings, while less populated regional areas had higher rates.
Sydney, where most people would assume that investors were land-banking properties, had the lowest rate in the country, as the below table shows:
Source: ABS Census – Location on Census Night
“Half of unoccupied dwellings are in regional areas, which really doesn’t fit the narrative of investors leaving properties vacant just for capital gains,” said Rawnsley.
Overall the analysis suggests that the one million plus unoccupied dwellings on census night isn’t the huge issue that it may have seemed at first glance, and there are many reasons why properties may be left vacant for extended periods.