As published at Online Opinion:
Despite Melbourne’s record-long housing affordability crisis, 64,386 empty homes were quantified in 2013. Vacancy hotspots surrounded the usual suspects of prime location, infrastructure, culture and education. This Housing Supply Crisis is aided and abetted by an ineffective taxation regime.
But you wouldn’t know so many vacancies existed if you watched the published vacancy rates. The vacancy rates mentioned in the press do not include those properties held empty by speculative investors chasing capital gains. They only include those properties advertised ‘for rent’.
Prosper Australia identifies empty homes by analysing abnormally low water consumption rates averaged over 12 months. We believes this trend of hidden vacancies is national and must be investigated the longer this housing crisis continues.
With investors now running at some 50% of all housing loans (up from 12% in the mid 80’s), the effects are starting to add up. The divergence between rental income (median $18,000 per annum) and capital gains ($60,000) is accelerating. An increasing number of property investors are choosing to leave their properties empty. Some investors acknowledge that by leaving 10-20% of their growing property portfolio empty, they will enforce scarcity, pushing rents and prices upwards.
Read the rest at Online Opinion.
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