Vacant properties: are the figures overstated? Onthehouse.com.au's Eliza Owen

Vacant properties: are the figures overstated? Onthehouse.com.au's Eliza Owen
Vacant properties: are the figures overstated? Onthehouse.com.au's Eliza Owen

GUEST OBSERVER

In March this year, investigation from the City Futures Research Centre at the University of New South Wales suggested that vacant properties across Sydney were constricting supply and adding to unaffordability.

The number of unoccupied dwellings in Sydney was derived from 2011 Census data, and researchers found that approximately 120,000 dwellings across Sydney were unoccupied on the night of the Census. It was also found that a higher concentration of vacant properties were found in inner-city suburbs, where rental yields are low.

The study concluded that the ability to negatively gear investment properties and receive large capital gains tax concessions incentivised investors to hold properties empty. This would explain why vacancies were higher where the capital gains on an untouched property exceeded the benefit of renting it out.

However, the evidence found may not support this conclusion, partly because properties have to be rented out or at least available for rent in order to receive benefits from negative gearing.

Representatives from the real estate sector claimed that the figure of vacant properties and its impact on affordability was overstated, as the data did not take into account properties that were vacant because they were on the market and people were in between moving homes. However, Residex data shows that on the night of the Census, there were approximately 6,100 properties listed for rent and approximately 14,200 properties listed for sale in Sydney. Listed properties are not necessarily vacant, but assuming they are, this would account for just 17% of the vacant properties estimated across the greater Sydney region on Census night.

It would seem that market activity cannot account for the majority of the vacant properties in Sydney’s metropolitan.

Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted here.

Eliza Owen

Eliza Owen

Property market analyst. I hold a first class honours degree in economics from the University of Sydney. I have been a regular economic commentator on FBI Radio, and have been a guest speaker on Triple J’s Hack, 702 ABC Radio, Sky News and at TEDxYouth Sydney. I have provided comment for various media outlets including The Guardian Australia, the Australian Financial Review, Pedestrian TV, the Daily Telegraph and more.

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Sydney Vacancy Rate

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