The recently released Australian Bureau of Statistics 2016 Census of Population and Housing (ABS Census) data provides insight into how Australians live. This article on unoccupied dwellings is the second in our series on the 2016 Census. Click here to read the first article, The changing face of apartment living.
Since the release of the first tranche of 2016 Census data, the number of unoccupied dwellings recorded on Census night has attracted a great deal of attention. On Census night there were over one million dwellings unoccupied. This is 11.2 per cent of all dwellings. Investors intentionally leaving homes unoccupied in capital cities and the rise of Airbnb were blamed by some for this large number of unoccupied homes.
However, the 11.2 per cent of unoccupied
dwellings is only 0.5 percentage points higher than the 2011 Census. As shown
in Table 1, the percentage of unoccupied dwellings has been trending up since
2001, but unoccupied dwellings have consistently made up around 10 per cent of
dwellings over the past 35 years.
Table 1: Dwellings by typeSource: ABS Census - Place of Enumeration
Why are Dwellings Unoccupied?
There are a range of reasons why a dwelling could have been unoccupied on Census night. These include:
- The dwelling was newly constructed but was not yet occupied
- The dwelling was for sale or under offer but was not occupied
- The dwelling was undergoing repairs or renovations
- The dwelling was awaiting demolition
- The dwelling was a short term or long term rental property
- The dwelling was a holiday home or crash pad
- The dwelling was unoccupied due to the residents being away
- The dwelling was a deceased estate
- The dwelling was owned by a business and has no usual residents
During the 1980s, the reasons why a dwelling
was unoccupied was collected as part of the Census. As shown in Table 2 the two
main reasons for a dwelling being unoccupied were that it was a Holiday home or
the Residents were absent on Census night. These two categories accounted for
60 to 65 per cent of unoccupied properties.
Table 2: Share of unoccupied dwellings by reasonSource: ABS Census - Place of Enumeration
This data has not been collected since 1986, so a set of assumptions and other data sources were applied to develop a similar breakdown for 2016. These assumptions and data sources are listed in the appendix of this article, and the results are shown in Table 3. The two largest categories remain Holiday homes or Residents absent, accounting for more than two thirds of all unoccupied dwellings. The share of Holiday homes is lower than the estimates from the 1980s, which makes sense giving falling home ownership rates. Residents absent was higher, which given the increased mobility of households would also appear to make sense.
Table 3: 2016 Share of unoccupied dwellings by categorySource: SGS Economics and Planning
This is further confirmed by spatial analysis of
the number of unoccupied dwellings. Areas with the highest demand for housing
tend to have the lowest level of unoccupied dwellings, primarily capital cities,
while regional areas have higher rates of unoccupied dwellings.
Where are the Unoccupied Dwellings?
As shown in Table 4, the share of unoccupied
dwellings is higher in regional areas compared to the capital cities. Sydney’s rate
of 7.3 per cent is the lowest in the country, while Regional South Australia is
the highest (22.0 per cent). This aligns with Sydney’s highly competitive property
market and low levels of demand in regional South Australia.
Table 4: Unoccupied private dwellings by regionSource: ABS Census - Location on Census Night
Figure 1 presents the percentage of unoccupied dwellings for each Statistical Area 4 (SA4) in Australia. The SA4 with the highest share of unoccupied dwellings is the South East SA4 in Tasmania at over 30 per cent, followed by the South East SA4 in South Australia, Mornington Peninsula, Latrobe - Gippsland and the Barossa - Yorke - Mid North, all of which have around 22 per cent of dwellings being unoccupied.
The spatial distribution of high rates
of unoccupied dwellings suggests that it can be linked to two distinct
characteristics. The first is that the area is a popular holiday destination (such
as Mornington Peninsula, Barossa - Yorke - Mid North, and Southern Highlands-
Shoalhaven) and is likely to have particularly high proportions of Holiday
homes and Short and long term rentals.
The second is that the area (such as Latrobe
– Gippsland) has suffered a loss or significant decline of major industries (for
example mining or energy production) which has led to declining populations.
These areas would have higher than average numbers of unoccupied dwellings that
are either for sale or have absent residents.
Four of the top five SA4s with the
lowest rate of unoccupied dwellings are in the rapidly growing areas of Sydney,
with the fifth SA4 being Moreton Bay – South in Brisbane. With high levels of
demand in these locations, vacancy rates for rental properties will be lower,
and because properties are on the market for a shorter time there will be less
unoccupied dwellings. These areas would also have fewer Holiday homes and Rentals,
and these are less likely to be unoccupied due to the competitive nature of the
Figure 1: Percent of unoccupied dwellings - Australia
Source: ABS Census - Location of Census Night
Figures 2 and 3 present the SA4s for
Sydney and Melbourne. Melbourne Inner has a higher percentage of unoccupied dwellings
(possibly due to the large supply of new apartments that were newly completed
around August 2016) and Mornington
Peninsula has much higher levels of unoccupied
dwellings due to the presence of many Holiday homes and Short term rentals.
Figure 2: Percent of unoccupied dwellings - Melbourne
Source: ABS Census - Location on Census Night
There is a more consistent picture
across Sydney, although the SA4s containing the north west and south west
growth areas tend to have slightly lower rates of unoccupied dwellings, and
this is where there is particularly high rates of population growth.
Source: ABS Census - Location on Census Night
An area for further research is to examine how spatial trends in unoccupied dwellings have changed over time since the 2011 and 2006 Census.
While there were over one million dwellings unoccupied on Census night, there does not appear to be a large pool of dwellings being withheld from the housing market. It appears that most dwellings that were unoccupied on Census night were unoccupied for a very valid reason. The two largest categories of unoccupied dwelling are Holiday homes or the Residents absent, which accounts for two thirds of all unoccupied dwellings. Dwellings are more likely to be unoccupied in regional areas than in capital cities. This is the result of lower demand rather than housing being intentionally withheld from the housing market.
Appendix: 2016 Unoccupied Dwellings Estimation Assumptions
Using a set of assumptions and other
data sources, a breakdown of different categories of unoccupied dwellings was
developed for 2016. These assumptions and data sources are listed below.
- For Sale: Given roughly 5 per cent of properties are for sale, it has been assumed that 5 per cent of unoccupied dwellings will also be for sale.
- Rental (short and long term): The rental properties was estimated to be 110,000 based on an assessment of rental properties (both available via private agencies and Airbnb).
- Newly completed: From Building Activity Australia (ABS Cat. No. 8752.0), the average number of dwellings completed in the June - September quarters of 2016 was 55,000.
- Repairs and alterations/awaiting demolition: Based on the average percentage from the 1981 and 1986 Census data.
- Holiday homes: The 1986 Census number of holiday homes was used as a starting point, and the overall dwelling growth rate was applied to produce the 2016 estimate.
- Resident absent: Based on the number of people collected in the Census as not being at their usual address. The average number of people resident (1.8) in Lone person and Couple Only households was then used to convert the number of people into households. (The assumption here being that families would be less likely to be travelling on Census night). This was then increased by 10 per cent to account for people who were travelling internationally on Census night.
- Other: The residual number of unoccupied dwellings were then assigned to the Other category.