Lyla Lindsey
Australia is currently facing a housing crisis, with a significant shortage of rental properties and first homes for buyers. This is partly due to the large number of unoccupied homes across the country, with estimates ranging from 136,000 to 1 million empty houses. These vacant properties are often a result of second homeownership, holiday homes, and homes left unoccupied due to various circumstances such as deceased estates, delays with councils, or owners in aged care. While there have been discussions about repossessing or taxing these empty homes to alleviate the housing crisis, no widespread solution has been implemented yet. This situation highlights the complex nature of Australia's housing market and the challenges faced by those seeking affordable rental or ownership options.
| Characteristics | Values |
|---|---|
| Number of empty homes in Australia | 1 million (according to 2021 census data), up to 136,000 or 140,000 ("inactive" or vacant homes) according to other sources |
| Reasons for vacancy | Second homes/holiday homes, sales process, need for vacant possession, deceased estates, delays with council, owners in aged care, lack of finances to rebuild, deliberate land banking, homes being rented out, homes used for storage, homes bought for mistresses or as investments, homes tied up in legal battles or wills, homes bought by land bankers interested only in the land |
| Proposed solutions to housing crisis | Land tax/vacancy tax, state governments using constitutional powers to take possession of long-term vacant properties, incentivising owners to put vacant properties back into use, limiting short-stay rentals, local governments encouraging homeowners to make excess housing available to the long-term rental market, legislation to help pensioners downsize and free up housing stock |
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What You'll Learn
Where to find empty homes in Australia
According to the Australian Bureau of Statistics, up to 136,000 dwellings could be sitting unused across Australia. This data, which was compiled in June 2021, debunks the idea that 1 million homes are empty across the country, a number that came from misinterpreted census data.
Melbourne has the highest number of inactive dwellings, with 4,449 homes not in use, making up 5% of all dwellings in the city. Sydney has 3,568 dwellings not in use, making up 3.1% of the LGA, while Brisbane has 5,952, or 1.2% of all dwellings.
There are several reasons why so many homes are empty in Australia. One reason is that there was a mass exodus of people from Australia during the Covid pandemic, which may have included property owners and overseas investors who were unable to occupy their properties. Another reason is that there was a lot of property construction during 2021, after property-purchasing incentives such as the homebuilder grant.
The proportion of unoccupied houses is much higher outside of Australia's state and territory capital cities. This can be due to dwellings on rural properties where owners have moved into local towns, regional and rural areas that have experienced population decline, or areas where people have a beach or rural retreat house that will only be occupied for short periods for holidays.
In some parts of Australia, there are very low supplies of rental housing, which has raised concerns about the significant number of unoccupied homes. However, experts are not convinced that addressing the number of unused dwellings will solve the housing crisis.
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Why homes are left empty
Australia has been facing a housing crisis for decades, with a significant shortage of housing and an affordability and rental availability crisis. The 2021 Census data revealed that there were one million unoccupied homes in the country, although this number may be a result of a systematic error in the counting process. The Australian Bureau of Statistics (ABS) determines whether a dwelling is occupied or not based on the returned census form. If a form was not returned, and the ABS had no further information, the dwelling was often deemed to be unoccupied. This error in counting, coupled with the fact that the census picks a night in mid-winter when most Australians are at home, means that holiday homes and homes whose owners are travelling or on holiday are counted as unoccupied.
There are several reasons why homes are left empty in Australia. One of the main reasons is that people own second homes or holiday homes that they don't use regularly. This is particularly common in sea-change and inner-city holiday spots, such as Victor Harbor in South Australia, Lorne in Victoria, and Batemans Bay in New South Wales. Additionally, some homes may be left empty due to the sales process and the need for vacant possession. In some cases, overseas investors may have purchased properties in Australia but have been unable to occupy them due to the Covid pandemic.
Another reason for empty homes is the way the housing market works. For example, some homes may be left vacant as owners wait for investment opportunities to mature or for the local area economics to make it more profitable to sell or redevelop the property. This practice is known as land banking and is discouraged by laws such as Victoria's Vacant Residential Land Tax (VRLT). However, despite these efforts, there are still too many ways homes in Australia can be left unoccupied for extended periods, which has a negative impact on the housing market and contributes to the housing crisis.
Furthermore, some homes may be left empty due to population decline in regional and rural areas. As owners move into local towns, particularly as they age, their previous dwellings may be left vacant. Additionally, some owners may choose to keep their homes vacant rather than making them available for rent or resale, especially in regions that rely on tourism, as this can reduce accommodation options for visitors.
While there are potential solutions to encourage the use of vacant homes, such as removing caps on council rates, treating short-term rentals as commercial properties, and implementing land taxes, there are also political costs and risks associated with compelling owners to make their properties available for rental or resale.
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How to buy empty homes
Australia is currently facing a housing crisis, with a severe shortage of affordable rental properties and a lack of availability for first-time homeowners. It is estimated that there are up to 136,000 empty houses in Australia, with Melbourne and Sydney being the cities with the highest number of inactive dwellings.
There are several reasons why these homes may be empty. One significant factor is the ownership of second homes or holiday homes, which are not regularly occupied. The COVID-19 pandemic also played a role, with a mass exodus of people from Australia, including property owners, returning to their home countries. Additionally, there could be properties that are vacant due to the sales process or being held for vacant possession. Other reasons include deceased estates, delays with council, owners in aged care, lack of finances for renovation or rebuild, and deliberate land banking.
If you are interested in purchasing an empty home in Australia, there are a few steps you can take:
- Identify the areas with a high number of inactive dwellings, such as Melbourne, Sydney, and Brisbane.
- Utilize property data and public records to track down the owners of these empty homes. This may involve researching ownership information, contacting neighbours or local councils, or referring to online platforms like Reddit, where individuals have shared their experiences in locating owners of vacant properties.
- Understand the potential reasons why these homes are vacant, as this may impact your purchasing process and any future plans for the property.
- Consider the financial implications, including any applicable taxes or incentives related to vacant properties. For example, Victoria has implemented a vacant property tax that increases the longer a home is left empty.
- Engage with real estate agents or legal professionals who can guide you through the purchasing process and ensure you are compliant with any relevant regulations or laws.
It is important to note that while purchasing an empty home can be an opportunity, it may not be a straightforward solution to Australia's housing crisis. There are complex factors at play, including the free-market nature of the Australian housing landscape and the potential for vacant properties to be utilized through rental or resale.
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The impact of empty homes on the housing market
Secondly, the existence of vacant homes in a country with a growing population raises questions about the efficiency and accessibility of Australia's real estate market. The housing landscape in Australia operates as a free market, with limited government intervention. This has resulted in a scarcity of available homes, driving up prices and creating a speculative environment where investors buy and hold vacant properties, anticipating future capital gains.
Thirdly, the prevalence of empty houses and rooms is not evenly distributed across the country. Certain areas, such as Melbourne and Sydney, have a higher concentration of unused dwellings, impacting local communities and contributing to urban decay. This uneven distribution also affects the availability of housing for those in need, with homeless individuals paying the highest price.
Lastly, the impact of empty homes extends beyond the immediate housing market. It influences infrastructure planning and development, as governments and local councils must consider the need for services and amenities in areas with seemingly low occupancy rates. This can lead to inefficient land use and underutilised resources.
While some commentators suggest that addressing vacant homes could alleviate the housing crisis, others argue that it is not a simple solution. Implementing vacancy taxes, for example, may only have a minor impact on reducing rents and prices, and there are legitimate reasons why some houses remain vacant. Therefore, while empty homes do impact the housing market, a combination of factors, including zoning, planning laws, and underinvestment in social housing, contribute to the complex issue of housing affordability in Australia.
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The process of purchasing an empty home
Finding Empty Homes
Start by identifying areas with a high concentration of empty homes. According to recent data, Melbourne, Sydney, and Brisbane are among the cities with the highest number of vacant dwellings. Utilise resources like the Australian Bureau of Statistics' housing snapshot data and electricity consumption data to pinpoint specific locations with a high number of unoccupied dwellings.
Understanding the Reasons for Vacancy
Empty homes can be vacant for various reasons, including being used as holiday homes, being tied up in legal or inheritance disputes, or even being deliberately left vacant for investment purposes. Understanding the specific reason for vacancy can help you navigate the purchasing process more effectively.
Locating Owners
Once you've identified a property of interest, the next step is to locate the owner. This can be done through property data, public records, and even by speaking to neighbours. In some cases, owners may be overseas investors or residents, so be prepared to potentially deal with international transactions.
Engaging with the Owner
When you've located the owner, initiate contact and express your interest in purchasing the property. Be mindful that some owners may be hesitant to sell, especially if they have specific plans for the property, such as renovation or redevelopment. Be respectful of their plans, but also highlight the benefits of selling the property, such as relieving them of the burden of an unused asset.
Negotiation and Purchase
If the owner is willing to sell, proceed with the negotiation and purchase process. Engage the services of a reputable real estate agent or solicitor to guide you through the legal and financial aspects of the transaction. Ensure that all necessary inspections, surveys, and checks are conducted, just as you would when buying an occupied home.
Post-Purchase Considerations
Depending on the condition of the property and your plans for it, you may need to engage in renovation or refurbishment. Be mindful of local regulations and town planning rules, especially if you intend to make significant changes to the property. Additionally, consider how you can contribute to alleviating the housing crisis by putting your newly purchased home to good use, whether through long-term rentals or other initiatives.
Remember that each empty home has its unique story, and the process of purchasing one may vary. Stay informed, be patient, and always seek professional advice when needed to navigate the complexities of purchasing empty homes in Australia.
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Frequently asked questions
According to the 2021 Census, there are 1 million empty homes in Australia, which equates to 10.1% of the country's private dwellings. However, some sources suggest that the number of empty homes is lower, at 136,000 or 140,000.
There are several reasons for the high number of empty homes in Australia. One reason is that many people own second homes or holiday homes that they do not use regularly. Additionally, there has been a recent increase in property construction, and some people may be unable to occupy their properties due to factors such as the COVID pandemic. Other reasons include homes being land banked, and owners facing issues such as delays with the council, lack of finances, or legal issues.
To find an empty home to purchase in Australia, you can start by searching online or contacting a real estate agent. You can also try driving around the areas you are interested in and looking for homes that appear vacant. Additionally, you can try contacting local councils or checking public records to identify empty homes and track down their owners.
When purchasing an empty home in Australia, it is important to be aware of any local laws and regulations regarding vacant properties. Some areas may have vacant property taxes or other incentives to encourage owners to put their properties back into use. There may also be legal considerations if the property has been left vacant for an extended period, such as health and safety issues or bylaw violations. It is important to do your due diligence and research any potential legal or financial implications before purchasing an empty home.
