June 21, 2022

Rent crisis: 87,000 properties ‘empty’, water’s on, no-one’s home

Only a minority of these homes will be actually unused but some will be  -- particularly homes owned by people living overseas.  Some owners are so wary of the unrecoverable damage that tenants can and do sometimes inflict that they regard protecting their investment as a higher priority than renting it out for income.  

And given the extremely pro-tenant laws, who could be blamed for not wanting to tangle with tenants?  Landlord protection laws would put most of the properties into the rental market but there is no prospect of such laws emerging.  Government meddling in the market is once again producing perverse behaviour.  Legislation designed to help tenants in fact hurts them.  At the very least, it pushes up their costs

I in fact have a rental property that I do not rent out  even though it is little used.  I prefer to keep it available for occasional use by family rather than bother with tenants and all the "protections" that come with them.  I am not even allowed to bar pets these days.  Awful of me but if you smell what some pets do to carpet you will understand.  I have been a landlord.  I know.

If tenants want more choice of housing, they should be telling governments to back off -- which is exactly the opposite of what is proposed below.  The proposals below would undoubtedly take even more housing out of the rental market.  You can only push people so far.  And guess what?  Landlords are people too!

Despite the worst rental crisis on record, about 87,000 ‘empty’ homes are not being put to work prompting calls for penalties against owners who don’t rent them out.

Shock analysis of the latest housing data released by the Australian Bureau of Statistics shows around 87,000 Qld residential properties that aren’t the main home of their owners were not being rented out, a figure which stretches out to 577,000 nationally.

An ABS spokeswoman said “the data includes properties used for other purposes, such as holiday homes, second residences, dwellings occupied rent-free by family members etc”.

Veteran property expert Michael Matusik said new tax measures were necessary to incentivise or penalise owners to release the homes for rent given how tight the market was.

“Around 29 per cent of investment properties are not rented out. They are sitting there vacant.,” he said.

Exclusive data from Qld’s biggest water provider, Urban Utilities, revealed 19,500 homes across lower SEQ had their water connection on, but noone seemed to be home for months.

Spokeswoman Michelle Cull said the firm provided water and sewage for around 590,000 residential properties in Brisbane, Ipswich, Somerset, Scenic Rim and Lockyer Valley – with new data finding about 3.3 per cent had low or no water consumption over a three-month period.

“According to our water usage data, around 19,500 properties in our service region had a water usage of between zero and two kilolitres during the last quarter of 2021 (October to December),” Ms Cull said.

“Properties may have no or low water usage for a range of reasons including the use of water tanks instead of town water supply, residents could be away from home, or the property could be vacant or uninhabitable.”

Unitywater executive manager customer and community Katherine Gee said their numbers showed 2,104 houses that used 1,000 litres or less water over a 90 day period – of which 96 were in Noosa, 1,020 on the Sunshine Coast and 988 in Moreton Bay.

“It is important to note that it cannot be categorically stated that these properties are ‘vacant’. We operate in a desirable region and some of these properties may be holiday homes or homes that are occupied for only parts of the year,” she said.

Mackay Regional Council confirmed it too had zero/low consumption segments “however, this is not a definite indication that the property is vacant” given “the property owner may be away for an extended period, it could be a holiday home or estate or the owner may have another water source (rainwater/bore)”.

The figures for ‘empty’ apartments are harder to get given “there are a significant number of residential units/complexes that feed off a single meter and it will depend if each unit/complex are separate parcels of land (lot and plan),” a Mackay spokeswoman said.

The rental crisis spurred Brisbane Mayor Adrian Schrinner to open the floodgates over under-utilised rental properties, announcing “significantly higher rates” for landlords who “turned homes into mini hotels”.

“If owners have these properties in the market for a short term, that is their choice, but what they’ll be facing now is a 50 per cent increase in their rates. We’re excluding (those that rent out) individual rooms. This is about people who rent out the whole house.”

The city saw house rent surge 22 per cent in the past year to $610 a week, with units up 11.2 per cent to $430 a week, latest SQM Research data found. It put Brisbane’s vacancy rate at 0.7 per cent – its tightest level in history – with listings almost halving in one year (-46 per cent) to 2,200.

There are now calls for the Qld Government to step up, with Strata Community Association Qld president Kristi Kinast repeating calls for legislation to allow bodies corporate to ban short-term letting.

“This is currently impossible for 99 per cent of Queensland’s strata communities,” she said. “SCA Qld believes this is a good policy that will help alleviate rental shortages and discourage short-term letting in strata schemes that were not intended for that purpose.”

The Federal Government’s whip has been a vacancy fee penalty – enforced against international buyers who leave their real estate investments empty.

Australian Taxation Office figures show it collected $2.3m in penalties in 2021, $3.7m in 2019/20 and $1.8m in its first year of collection (2018/19).

Prosper Australia director of advocacy Karl Fitzgerald said foreign investors were not solely to blame for empty or under-utilised homes, with “speculative vacancies” by Australian investors curbing supply and pushing prices higher.

He said governments needed to reduce incentives for short-term profiteering from housing.

“Higher land taxes, more effective vacancy taxes and even curbing interest-only loans could all help. Switching away from stamp duties and towards land taxes – the ultimate vacancy tax – is a vital step forward.”

The best form of vacancy tax locally, Mr Fitzgerald said, would be to replace stamp duty with a land tax set at a significant rate of about 1.5 per cent of site values.

He said the ATO should also consider denying depreciation as a tax write-off if a property owner did not put it up for rent at a competitive rate. “Further investigation is needed of an incremental land tax for sites that refuse to be put to work.”

https://www.couriermail.com.au/property/rent-crisis-87000-properties-empty-waters-on-noones-home/news-story/3ca0caf5850f074335aac1999085f45c

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