Empty Homes for All to See

Karl FitzgeraldCommentaryLeave a Comment

The Sydney Morning Herald is on our side. Today’s headline news includes an article featuring Bubblepedia.net, a wiki set up by Dr Daniel Cox for photos of vacant homes to be uploaded onto the web. What a great idea! We have a Panoramia page with some of our vacant photos uploaded.

The article, entitled Empty Homes for All to See, is an indictment on the inaccuracy of vacancy figures collected by a group with a vested interest in skewing the results their way.

We pointed out in the I Want to Live Here report that the published vacancy figures of the Real Estate Industry of Victoria are inaccurate. They only list those properties on the market at present, those advertised through Real Estate Agents. This excludes:

  • those that are being held off the market because the capital gains of 15% per annum are at least double the annual rental income – why bother renting them out?
  • all those properties that are being privately advertised
  • those that are used only once per year (ie owners fly in when Melbourne Racing Carnival is on or Sydney Fireworks)

The overstated scarcity of land and property encourages an atmosphere of desperation in the buying market. A genuine vacancy rate would include all vacant property, especially vacant land, which constituted 93% of the vacancies in the I Want to Live Here report.

Beyond the troubles associated with negative gearing in the housing affordability quagmire, the real cause is the lack of holding charges on land. If Council Rates were reformed in Victoria by moving charges off buildings (CIV) and onto land (Site Rental rating), land banking would no longer be economic. When Land Taxes are reformed into a flat Site Rental (because locations naturally reflect higher values in areas where richer people live, thus superseeding the role that progressive levels of taxation presently address) and raised, then vacancies will no longer will be economic.

Adding to the motivation for property speculation is the knowledge by those in the know that working class taxes fund the roads and schools that add services and thus value to the surrounding land. A well reformed Site Rental would naturally capture this increase in value, recycling the public’s efforts back into the public funding system rather than into the deep pockets of the nations wealthiest industry.

This is the wholesale tax change needed to re-balance the playing field away from the speculative activity the tax system encourages and towards a productive role for entrepreneurs.

We are looking for volunteers to engage in a survey of the Melbourne CBD to shoot down this continuing farce. Gen X & Y are getting the raw deal on all fronts…

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