Australia’s rental crisis is especially tight on the Gold Coast. How can we free up empty homes?

It is one of the tightest rental markets in Australia.

But as rents surge and thousands face housing insecurity, statistics suggest almost three in 10 houses are empty in parts of Queensland’s Gold Coast.

At the same time, 10 per cent of households on the Gold Coast — as well as in the nearby areas of Logan and Beaudesert — are either homeless or living in unaffordable housing.

So, why are so many dwellings unoccupied, and can anything be done to open them up?

Empty homes above the national average

The rate of empty homes is highest on the Gold Coast’s coastal strip.

But the rate is not as high as coastal holiday towns in Victoria, Tasmania, South Australia and Western Australia, where about 50 per cent of dwellings are unoccupied. 

The national average of unoccupied homes is 10 per cent.

In tourism-reliant Surfers Paradise, 27.5 per cent of dwellings, or 7,009 homes, were unoccupied on census night, according to the Australian Bureau of Statistics.

In Broadbeach and Burleigh, 17.8 per cent of homes, or 5,733 dwellings, were empty, while at Coolangatta 14.4 per cent of homes, or 3,751, were unoccupied.

Experts note the ABS figures are a fairly blunt instrument because there is no explanation as to why the properties were empty.

Empty homes are nothing new

Despite the census data, it is not uncommon for buyers to purchase Gold Coast properties and leave them empty for much of the year.

Independent property analyst Michael Matusik said the Gold Coast was an attractive area for investors, and some were happy to keep homes untenanted for years.

“They say we’re going to buy an apartment on Surfers or Broadbeach or whatever, we’re going to rent it out now, or we’re going to just lock it up and use it occasionally,” he said.

“And one day we might move into that when we retire.”

Mr Matusik said there could be ways to open up the much-needed homes, with incentives such as land tax and rate reductions for investors who rent properties.

“I’m not saying that there isn’t an opportunity somehow to actually use a carrot or a stick,” he said.

Calls for a vacancy tax

The government could encourage owners to bring empty properties onto the market through disincentives, Queensland Greens MP Amy McMahon says.

Her party is calling for a levy on owners who keep their homes empty for most of the year. 

The policy would result in owners being taxed at 5 per cent of the value of their empty homes annually, if the properties were vacant for more than six months of the year.

That would mean an owner with an apartment worth $650,000 would pay an annual levy of $32,500.

“The government stresses that there is an issue of [housing] supply, and I don’t doubt that that’s true,” Ms McMahon said.

“But there is some low-hanging fruit here with vacant properties right across the state that could be opened up right now.” 

She said while some property owners could afford to pay the levy and keep properties empty, a significant number of homes would be added to the rental market.

“There are tens of thousands of Queenslanders that are struggling right now to find somewhere to put a roof over their heads,” she said.

Ms McMahon said housing should not be treated primarily as a store for wealth.

“I guess the message we would send to investors is that housing is a human right, this isn’t a plaything for you to make money out of,” she said.

Hard to know costs of tax

It is difficult to know how effective a vacancy tax would be, according to Australian Housing and Urban Research Institute managing director Michael Fotheringham.

Victoria brought in a similar policy for council areas around Melbourne in 2018.

Although it was at a lower tax rate of 1 per cent, Mr Fotheringham said it did not make much of a dent in unoccupied dwellings being opened up to renters.

“No material impact was visible in terms of the vacancy rate of Melbourne. [It] is much the same as the vacancy rate in Sydney,” he said.

“If you take those two cities as pretty close to approximations of each other, one with that kind of vacancy tax and one without, they’re about the same.”

Mr Fortheringham said it might also be difficult to zero-in on investors who preferred to keep their property empty.

“The proportion that is actually land banked, which is really what we’re aiming at, people who own a property and plan to leave it empty long term.”

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Rental vacancy rates on the Gold Coast are below 1 per cent.(ABC Gold Coast: Dominic Cansdale)

Mr Fotheringham said owners who could afford to leave a property empty might prefer to pay a vacancy tax.

“Someone who’s got the financial capacity to own a property and not want a rental yield on it, can probably afford to pay a tax on it,” he said.

“There’s no one silver bullet … so we need to look at lots of different solutions, so for that principle, certainly open to [a vacancy tax]. I don’t know that this would make a hell of a lot of difference.

“Let’s say it brought on, you know, 30 homes, that’s great. That’s 30 households accommodated for, that’s a good thing. The question is, what’s the cost of doing that?”

Article source: Queensland Property Investor