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Speculation has outpaced supply
That's the TL;DR. Not that we didn't already know, but nice to see it confirmed (yet again).
Now do actual number of people per dwelling over the same time period
Ok so if the number of dwellings has increased at the same rate as the population has grown, why is it so hard to find somewhere to rent?
I'm not saying the numbers are wrong, I just don't understand why there's a shortage.
Same as every other place I assume. Rich fucks buying up property as investments.
This shit is happening everywhere. Even in India housing prices are astronomical. Some places in Mumbai are as expensive as New York while the median income is nowhere near that.
That doesn't create a shortage of rentals though.
What do you think "property" is in this context?
They are buying homes and not renting them out. Holding them as an investment and/or making money off them on Airbnb.
Why would you buy a home and not rent it out?
AirBnB isn't helping but it's well established that it's not a significant driver of the problem.
If its just a speculative asset to be traded back and forth you dont want the extra hassle of managing renters.
Houses aren't a speculative asset like shares or gold. They take time and effort to sell, and it's costly.
Point is, you wouldn't intend to sell in less than several years. Rent might be $50k a year. No investor is leaving that on the table.
I had a quick search, this isn't something I've properly looked into, but empty homes can be valuable:
Speculative real estate investment can lead to homes being left vacant for quite long periods of time, as in some cases this helps to preserve their condition for resale and saves the investor from having to shell out for upkeep and maintenance. In cities with high-value real-estate like Melbourne, Sydney, New York and London, housing prices have risen much faster than wages, and many investors know that simply buying and holding property can be a more effective investment strategy than buying to rent. As Karl Fitzgerald of the Australian non-profit Grounded Community Land Trusts and member of GEHN notes:
‘If you consider that there’s been an 18% increase in Australian property values this year, that’s triple the rent you could make, so why bother renting it out?’ (GEHN 2022)
Jack Portman - "What is the value in an empty home? A perspective from Action on Empty Homes and the Global Empty Homes Network" https://www.tandfonline.com/doi/full/10.1080/13604813.2024.2390754#d1e98
This is why there have to be significant taxes on vacant rentals (including short term rentals like AirBNB).
It has to be made more expensive to keep a property vacant than to rent it out and maintain it, without increasing rent.
Rent assistance is just corporate welfare that drives up rent.
I don't think that says what you think it does.
It doesn't suggest that speculative vacancies are a driver of the housing crisis in Australia.
"Buying to Rent" means buying with no intention to sell after a given period of time. It means making an investment focused on the annual rent return.
Speculative real estate investment can lead to homes being left vacant for quite long periods of time
Often a speculative investor might leave a home vacant while they list it for sale. That's not the same as purchasing a property with the intention of leaving it vacant.
in some cases this helps to preserve their condition for resale and saves the investor from having to shell out for upkeep and maintenance
This doesn't make any sense at all. An investor reluctant to "shell out" for upkeep and maintenance is exactly the type of investor that needs the regular rent income to help cover the other costs of ownership like rates, body corporate, interest, et cetera.
Census data shows dwelling occupancy rates have been consistent over the last 15 years:
Note that these rates do not imply "speculative vacancy" is ~10%, as there are many reasons a property may be vacant on census night. They do however demonstrate that vacancy is not the cause of the current housing crisis.
Thanks for the detailed reply.
It doesn’t suggest that speculative vacancies are a driver of the housing crisis in Australia.
I was quoting that to explain that speculative vacancy can be a valid, highly profitable strategy for investors. That quote alone isn't evidence, yes.
An investor reluctant to “shell out” for upkeep and maintenance is exactly the type of investor that needs the regular rent income to help cover the other costs of ownership like rates, body corporate, interest, et cetera.
I don't understand how this can be assumed. Investors wanting to reduce cost and risk doesn't imply they need regular income. Rich investment funds would have the same incentive to do that, right?
They do however demonstrate that vacancy is not the cause of the current housing crisis.
Yes, it's not going to be the cause. There isn't going to be a single cause, like you said it isn't even the only cause of mass vacancy. In fact, given it's used as a long-term investment strategy, I suspect that this is a long-term factor that enabled or accelerated the crisis, rather than being an immediate catalyst that suddenly happened a few years ago.
Investors wanting to reduce cost and risk doesn't imply they need regular income
income offsets the cost and risk.
Like if you own a house that costs $5k in while vacant, but an extra $5k in maintenance while rented, why wouldn't you rent it for $50k? Investors always want that extra $40k. There is some risk but it's manageable.
Speculative vacancy is, IMO, barely worth a mention as regards Australia's housing crisis. People might want their investment properties vacant in very specific circumstances for limited periods of time but not in a general "this property has been vacant for 5 years" kind of way.
What generally happens to prices when there's a high demand and a low supply
That would only work if you owned every house.
Like if you buy a house, why would you forego the rent income just so everyone else's rent increases?
Why do they get all the money and not buy anything with it? Billionaires are horders, they don't use what they hoard.
Billionaires dont leave their billions sitting in a bank. Of course they buy things with it.
They demonstrably don't. They "buy" assets and stocks and some shit, but that's just another form of hoarding the money. They don't buy things, there is not enough things in the world to buy for them, and that's not what they're after. Elongated Muskrat bought a fucking twitter for an inflated price, and he's still a richest motherfucker in the world.
Do you really think a billionaire would be actively involved in buying houses to hoard them?
They wouldn't give a fuck. If they have excess money they're not looking at the stock market, they would just transfer the excess money to the trust that manages their excess money.
Billionaires are a big problem, they shouldn't exist, but you haven't drawn a real connection between billionaires and the Australian housing problem.
Doesn't matter how active they are. Yeah, most of of them don't give a shit that a particular scheme of theirs that some firm runs on their behalf buys new houses and uses them as assets. They are still the reason this all happens, they are the main catalyst for this shady practice. I mean, there is also shady corpos, but I pretty much lump all of that in one shitty ball of greed, like a hatesphere of evil of some sorts.
Treating houses as assets contributes to housing problem everywhere where there is no strong regulations against it.
Sorry chief. You're just making up nonsense based on the vibe. Everyone hates billionaires for good reason but they're not driving the housing crisis in Australia.
Covid made a lot of people realise they couldn't stand their housemates, airbnb slices, dwelling availability (empty places that no one wants to buy or want to landbank) , population shifts eg: one house of two people divorce, now need two houses, kid grows up and moves out etc etc.... lots of reasons.
This is the correct answer. Fewer average occupants per house, for a variety of reasons.
How many of these dwellings are available to rent long-term? The ABS definition is very broad:
A dwelling is a structure which is intended to have people live in it, that is it was established for short-stay or long-stay accommodation.
So AirBnB/Stayz/etc is a contributing problem.
Definitely, although my understanding is that even places like student accommodation and aged care homes contribute to that figure.
Numbers can lie, or at the very least obfuscate the truth. Consider the following, as an example:
Families are having fewer children, so the average number of people per home has dropped (eg. from 4/home to 3/home). That would mean we need 33% more homes just to account for the same population.
New housing stock may not meet needs; a tonne of studio, 1 bedroom inner city apartments may not be suitable for the above families, so demand for existing stock just increases.
Average income is not a useful metric. The higher the average gets, the further it drifts from the median.
Median is an average. It would be helpful if they specified whether they are using mean or median, but median is the average usually talked about with respect to income, precisely because it's much more useful.
Since our borders opened up post covid, our population has been growing at an average of 150k per quarter (https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/dec-2024), while we’ve only been building ~40k dwellings per quarter in that time (https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/latest-release ).
Total dwelling builds completed show around 200k per year, down to about 180k/year since 2019 up until now. The “we build more homes than our population demands” is not true, at least not since Covid, and our population growth has absolutely exploded in that time almost entirely due to immigration (see table “Components of quarterly population change” in first link).
Also number of total houses is almost irrelevant when most people, especially immigrants, want to live in the big cities.
As always with people trying to say “immigration isn’t the/an issue”, completely misses the point.
No one is saying immigration caused the housing affordability and availability crisis. No one. What we are saying is that we are in these crises now, and maintaining the current levels of immigration is making them worse and worse every single day.
Again for those that still don’t get it:
Immigration no cause problem. Problem happen. Situation terrible. Immigration now make situation much worse.
Semantics.Your point - that immigration excerbates existing underlying problems - specifically ignores the underlying problem, which in OPs post, describes that housing is a locked / controlled asset (due to it being a speculative investment) , which has itself created an artificial shortage.
Maybe spend less time confusing the issue, and take up a pitchfork against speculative home ownership.
It’s not semantics though, it’s a completely different argument to what you’re claiming is being made.
Maybe spend less time confusing the issue, and take up a pitchfork against speculative home ownership.
You’re the one who confused the issue though lol.
We want immigration paused until we can fix the housing crisis, as increasing the population by 400-500k+ per year while we have nowhere to even house a lot of the people already here is just making it worse. This is indisputable. More demand with same supply = higher prices and worse availability.
You think we’re saying immigration caused the housing crisis. We’re not. I’ve specifically told you that many times…….yet you still say that’s what we’re saying. You’re arguing in “bad faith” because you know you made a mistake but refuse to correct it.
Wow what another hot take. Still garbage.
Australia literally closed borders for years due to COVID (with bugger all disease internally). Immigration was effectively halted. Australia had the perfect opportunity to do exactly what you are saying... And did not.
The average increase in house purchase price, in all states, between 2020 and 2022 (i.e. while immigration pauses were effectively in place) immediately discredits your talking points.
Stop conflating immigration with the problem, which was, is, and remains, housing speculation.
Australia had the perfect opportunity to do exactly what you are saying… And did not.
Not sure if serious, but there were a few other gigantic things going on during that time lol.
Stop conflating immigration with the problem, which was, is, and remains, housing speculation.
Again you completely miss the point. Can you not read? Here, I'll quote myself for you:
You think we’re saying immigration caused the housing crisis. We’re not. I’ve specifically told you that many times…….yet you still say that’s what we’re saying. You’re arguing in “bad faith” because you know you made a mistake but refuse to correct it.