{"id":19719,"date":"2017-12-08T01:00:16","date_gmt":"2017-12-07T14:00:16","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=19719"},"modified":"2017-12-08T01:00:16","modified_gmt":"2017-12-07T14:00:16","slug":"the-great-unoccupancy-rate","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/","title":{"rendered":"The Great Unoccupancy Rate"},"content":{"rendered":"

Experts tell us that suburbs with a history of strong growth tend to provide the best investment opportunities, but looking back at the past is like driving a car and using only the rear-view mirror.
\nWe know where we\u2019ve come from, but not where we are going to \u2013 and because the dynamics of housing markets change over time, we need to have a reliable guide to the future, not the past.
\nIn this respect the new Census data comes to our rescue, with a quick and highly accurate tool to help us find \u2018buy and hold\u2019 suburbs \u2013 that is, areas where properties tend to provide the best long-term growth potential.
\nIt\u2019s called the \u2018unoccupancy rate\u2019 and it gives us the percentage of empty homes in any suburb or town.
\nThe reason it is useful is that there is a close correlation between high long-term house price growth and low unoccupancy rates.
\nUnoccupancy rates explained<\/strong>
\nAccording to the new Census data, about 11% of all our dwellings are unoccupied at any time. That represents over one million empty homes, and while that number does seem large, there are many reasons why dwellings can be empty.
\nUnoccupied homes make up nearly 30% of the dwellings in the Tasmanian suburb of\u00a0Zeehan<\/a>. Many of these properties have been abandoned because younger people have left the area and the demand for housing is falling. Forty per cent of the properties in the regional Queensland town of Dysart are also unoccupied. Many of these were speculative purchases made by investors during Queensland\u2019s coal mining boom years.
\nA staggering 77% of houses in Victoria\u2019s Sorrento are unoccupied, but unlike Zeehan or Dysart, that\u2019s not a bad thing at all, because they are bought and sold as holiday homes, for which there is high demand. This means that even though they are empty for most of the year, the vacancy rate in this area is intentional.<\/p>\n

“Sydney\u2019s overall unoccupancy rate is below 8%, while in\u00a0Darwin<\/a>\u00a0and\u00a0Perth<\/a>\u00a0it\u2019s much higher, at 11%”<\/em><\/h2>\n

Another example of this deliberate unoccupancy occurs in high-density inner-urban suburbs such as Melbourne\u2019s Docklands precinct, where nearly 20% of apartments are vacant. These are not rental vacancies, representing a huge surplus of rental stock \u2013 rather, many of these properties have been deliberately left locked and unoccupied from day one by their overseas owners, who purchased them for long-term security rather than rental income.
\nIf we exclude these dwellings from the count, we are still left with impressively large numbers of empty homes, even in our big capital cities, as Figure 1 shows.
\nSydney\u2019s overall unoccupancy rate is below 8%, while in Darwin and Perth it\u2019s much higher, at 11%. Dwellings may be vacant because they are for sale or awaiting settlement, while some are rental vacancies and others are being renovated or are up for redevelopment.
\nThere is a higher percentage of unoccupied homes in Perth and Darwin because demand is low and there are more properties on the market in these regions. This then puts downward pressure on prices, and you can see this effect in Figure 1, which also compares the long-term house price growth in our capital cities to the percentage of houses currently unoccupied. There is a strong correlation, with fewer empty homes corresponding to higher long-term price growth.
\nThe same correlation occurs at suburb level: suburbs with lower unoccupancy rates also have higher long-term price growth rates and therefore make better buy-and-hold investments.
\n\"\"
\nLonger than average unoccupancy rates<\/strong>
\nThe fact is, fewer empty homes in a particular suburb translates to higher long-term growth potential.
\nThere are around 9,300,000 residential properties in Australia, of which about 540,000 are bought and sold each year.
\nThis means the average period of home ownership is around
\n17 years, but there are two types of suburbs where the period
\nof ownership is much longer and the level of unoccupancy is consequently much lower than the average, And there are two main types of households in these suburbs.<\/p>\n

“A staggering 77% of houses\u00a0in Victoria\u2019s Sorrento are unoccupied \u2026 because they are bought and sold as holiday homes, for which there is high demand”<\/em><\/h2>\n

Firstly, there are families who have upgraded once or twice before to bigger homes in better areas, where they may live for \u00a025 years or more. The suburbs they move to are usually well established, with good services and facilities, and the houses they buy become family homes. When the owners eventually do sell, it\u2019s because of work commitments or their children have grown up and the family home has become an empty nest.
\n\"\"
\nSecondly, there are group households in suburbs where there are tertiary institutions and property owners let out rooms to students. Even though the students frequently move in and out, there are always some tenants in such group households. They generate constant rental demand and high rental yields for their owners, who consequently rarely sell their properties.
\nThis long-term ownership means these suburbs have a relative scarcity of housing stock compared to other suburbs. Homes in these suburbs are not bought and sold often and don\u2019t stay on the market very long. This is what real estate agents refer to as market \u2018tightness\u2019, which in turn endows such localities with the highest long-term growth potential of all our housing markets.
\nFigure 2 shows the Sydney suburbs that have enjoyed the highest long-term growth in house prices over the last 10 years, compared to Sydney\u2019s median house price growth over the same period.
\nWhile Sydney\u2019s house prices have risen by around 120% in the last decade, house prices in the suburbs shown in Figure 2 have grown at much higher rates over the same period of time.
\nNow look at Figure 3 and you will see that these same suburbs have much lower unoccupancy rates than Sydney as whole.
\n\"\"
\nThis phenomenon is not unique to Sydney. Figure 4 shows the best long-term house price performers in Melbourne over the last 10 years compared to Melbourne as whole.
\n\"\"
\nMelbourne\u2019s best-performing suburb over the last decade has been Caulfield East, with average house price growth of 16% annually. This has resulted in an overall rise in the median house price of nearly 350%. The suburb with the next-highest house price performance Ashwood, with growth of 200% \u2013 almost half the growth rate of Caulfield East.
\nNow look at Figure 5(overleaf), which shows you the unoccupancy rates of Melbourne\u2019s best long-term house price performers compared to Melbourne as a whole. Not only are they all lower than Melbourne, but the best performer, Caulfield East, also has the lowest unoccupancy rate.
\n\"\"<\/p>\n

“There are two types of suburbs where the period of ownership is much longer and the level of unoccupancy is consequently much lower than the average”<\/em><\/h2>\n

It is not coincidental that over half of Caulfield East\u2019s residents are upgrader families and nearly another quarter are made up of student group households.
\nThis relationship between high long-term growth and low unoccupancy rates is repeated in every capital city and makes it easy for you to find which suburbs have the greatest long-term growth potential.
\nUsing unoccupancy rates from the latest Census data to find the best buy-and-hold suburbs has some huge benefits for investors. The data is free, easy to understand, and best of all it\u2019s highly accurate, because while a suburb\u2019s high past price performance is telling you what has happened, its low unoccupancy rates tell you whether it is likely to continue.
\nOriginally published as: http:\/\/www.yourinvestmentpropertymag.com.au\/property-management\/shortterm-rental-property-managers-what-are-the-benefits-243731.aspx \u00a0<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Experts tell us that suburbs with a history of strong growth tend to provide the best investment opportunities, but looking back at the past is like driving a car and using only the rear-view mirror. We know where we\u2019ve come from, but not where we…<\/p>\n","protected":false},"author":176692471,"featured_media":19721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13,31],"tags":[70],"class_list":["post-19719","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-story","category-your-investment-property","tag-featured"],"yoast_head":"\nThe Great Unoccupancy Rate - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Great Unoccupancy Rate - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Experts tell us that suburbs with a history of strong growth tend to provide the best investment opportunities, but looking back at the past is like driving a car and using only the rear-view mirror. We know where we\u2019ve come from, but not where we...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2017-12-07T14:00:16+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"The Great Unoccupancy Rate\",\"datePublished\":\"2017-12-07T14:00:16+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/\"},\"wordCount\":1250,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"Featured\"],\"articleSection\":[\"Latest Stories\",\"Your Investment Property\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/\",\"name\":\"The Great Unoccupancy Rate - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2017-12-07T14:00:16+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/the-great-unoccupancy-rate\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Great Unoccupancy Rate\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. Anywhere, Anytime.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\",\"name\":\"rolanrush\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"caption\":\"rolanrush\"},\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/author\\\/rolanrush\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Great Unoccupancy Rate - Realty Talk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/","og_locale":"en_US","og_type":"article","og_title":"The Great Unoccupancy Rate - Realty Talk","og_description":"Experts tell us that suburbs with a history of strong growth tend to provide the best investment opportunities, but looking back at the past is like driving a car and using only the rear-view mirror. We know where we\u2019ve come from, but not where we...","og_url":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/","og_site_name":"Realty Talk","article_published_time":"2017-12-07T14:00:16+00:00","author":"rolanrush","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rolanrush","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#article","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/"},"author":{"name":"rolanrush","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"headline":"The Great Unoccupancy Rate","datePublished":"2017-12-07T14:00:16+00:00","mainEntityOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/"},"wordCount":1250,"commentCount":0,"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#primaryimage"},"thumbnailUrl":"","keywords":["Featured"],"articleSection":["Latest Stories","Your Investment Property"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/","url":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/","name":"The Great Unoccupancy Rate - Realty Talk","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#primaryimage"},"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#primaryimage"},"thumbnailUrl":"","datePublished":"2017-12-07T14:00:16+00:00","author":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"breadcrumb":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/channels.realty.com.au\/realtytalk\/the-great-unoccupancy-rate\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/channels.realty.com.au\/realtytalk\/"},{"@type":"ListItem","position":2,"name":"The Great Unoccupancy Rate"}]},{"@type":"WebSite","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website","url":"https:\/\/channels.realty.com.au\/realtytalk\/","name":"Realty Talk","description":"Your Trusted Voice For Property Investing. Anywhere, Anytime.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/channels.realty.com.au\/realtytalk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d","name":"rolanrush","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","caption":"rolanrush"},"url":"https:\/\/channels.realty.com.au\/realtytalk\/author\/rolanrush\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/19719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/users\/176692471"}],"replies":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/comments?post=19719"}],"version-history":[{"count":0,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/19719\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/media?parent=19719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/categories?post=19719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/tags?post=19719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}