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! 
Why is it important? 
! 
! Affordability crisis 
! “Housing Shortage” 
! Dilapidated houses 
(over-flowing mailboxes, u...
How do you tell if a property is vacant? 
! 
! Published Vacancy Rates 
(REIV, SQM Research) 
! Census Data 
! Neighbourho...
! 
! Is there a way to measure the rate of, and number 
of long-term vacant residential and commercial 
properties in Melb...
! 
! Conservatively low water consumption is a proxy measure to 
identify un-derutilised residential and commercial proper...
! 
! Data provided 1,475,771 
residential properties in 
393 suburbs. 
! 
! 94.4% of total residential 
dwellings in the g...
! 
! Conservative measure of 50 litres per day (LpD) per 
property used. (Shower – 12-15 litres per minute. Single flush o...
! 
! Vacant properties with leaks 
◦ Slowly dripping tap: 20-50LpD 
◦ Fast dripping tap: 230LpD 
◦ Full flow (tap on full)...
! Untenanted investment properties for sale. 
! 
! Demolished properties waiting for approval/renovation. 
! 
! Long perio...
! Escalating capital values outweigh net rental 
income, providing an incentive for vacant properties 
! The tax systems e...
• UNITS - More than 7 in 10 investors - inner city suburbs 
(Kingsville, Docklands, Carlton, and North Melbourne) 
! 
• HO...
! 
! Typical investor budget = $450,000-$650,000. 
! State Land Tax (SLT), with a zero rate levied below 
an assessed valu...
Owners Selling their homes in the June quarter of 
2014 after an average hold period of around 10 years 
!• 
Boorondara - ...
! Fewer Australians owning their homes outright (41-31% 1996/2011) 
! A rising percentage of long-term tenants renting for...
! There were 14,659 residential properties with no water usage 
throughout 2013 (1%), while 64,386 (4.4%) used no more tha...
! 
! Dataset and methodology not publicly available. 
! 
! Analysis done in-house, no oversight. 
! 
! Not audited by inde...
Commercial/Industrial Vacancies 
! There were 6,207 commercial (non-residential) properties with 
no water usage throughou...
! 
! The State government has gifted landowners with reduced land tax 
liabilities – the marginal tax rate is only 2.25% f...
! 
! #1: An improved State Land Tax (SLT) is levied on a low flat-rate, 
no-threshold basis, replacing the current progres...
! 
! #1: Governments must perform extensive analysis of the 
property market to determine reasons for vacancy. 
! 
! #2 En...
! 
! Many properties potentially and demonstrably vacant 
that could be placed on the rental market. 
! 
! High vacancy ra...
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
Innovative Vacant Housing measure - Speculative Vacancies 2013
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Innovative Vacant Housing measure - Speculative Vacancies 2013

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Catherine Cashmore presents on the hidden vacancies speculators hold in lieu of capital gains. 6.9% across Melbourne and up to 31.6% in some inner urban areas.
Unmeasured by standard definitions, these empty homes are damaging affordability with government turning a blind eye to the locked out generations.

Publicada em: Economia e finanças
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Innovative Vacant Housing measure - Speculative Vacancies 2013

  1. 1. ! Why is it important? ! ! Affordability crisis ! “Housing Shortage” ! Dilapidated houses (over-flowing mailboxes, un-kept lawns. Rusted industrial sites vacant shops, vandalism..) ! Land unemployment rate
  2. 2. How do you tell if a property is vacant? ! ! Published Vacancy Rates (REIV, SQM Research) ! Census Data ! Neighbourhood Watch and Community-Planning Groups ! Analysis of Electricity Use (Paris) ! Council Data (UK)
  3. 3. ! ! Is there a way to measure the rate of, and number of long-term vacant residential and commercial properties in Melbourne? ! ! Follows on from Speculative Vacancy reports from previous years. ! ! Now into the 7th year.
  4. 4. ! ! Conservatively low water consumption is a proxy measure to identify un-derutilised residential and commercial property stock. ! ! Data is un-fragmented and nearly complete – metropolitan households cannot change their water retailer as they enjoy a monopoly status. ! ! For the 2nd year, data is sourced from all three retailers: City West Water, South East Water & Yarra Valley Water. !
  5. 5. ! ! Data provided 1,475,771 residential properties in 393 suburbs. ! ! 94.4% of total residential dwellings in the greater metropolitan area. ! ! Also covers 126,529 commercial properties across 399 of Melbourne’s suburbs.
  6. 6. ! ! Conservative measure of 50 litres per day (LpD) per property used. (Shower – 12-15 litres per minute. Single flush of toilet – 12 litres.) ! ! Per capita consumption was 161LpD in 2012/13. Average daily usage for a two-person household 320LpD. Average daily use for a sole person 157LpD (2013.) ! ! Only 3% of households use less than 50LpD.
  7. 7. ! ! Vacant properties with leaks ◦ Slowly dripping tap: 20-50LpD ◦ Fast dripping tap: 230LpD ◦ Full flow (tap on full): 28,800LpD ! ! Apartment/unit blocks serviced with single water meter. (All newly constructed buildings are now required to install individual water meters)
  8. 8. ! Untenanted investment properties for sale. ! ! Demolished properties waiting for approval/renovation. ! ! Long period between old and new tenants. ! ! Serviced apartments (same reason as above). ! ! Water Tanks
  9. 9. ! Escalating capital values outweigh net rental income, providing an incentive for vacant properties ! The tax systems encourages investors to speculate – state land tax is low, capital gains are taxed at a discounted rate, and land price escalation is rapid. ! May be easier to let properties remain vacant (Landlord Costs). ! Cost of Renovation/Diseased Estates etc. ! Foreign Ownership
  10. 10. • UNITS - More than 7 in 10 investors - inner city suburbs (Kingsville, Docklands, Carlton, and North Melbourne) ! • HOUSES – More than 3 in every 10 properties on the western fringes of the state. (Point Cook, Tarneit and Truganina at 41.9%, 40.9% and 39.8% respectively !!!
  11. 11. ! ! Typical investor budget = $450,000-$650,000. ! State Land Tax (SLT), with a zero rate levied below an assessed value of $250,000. ! $450,000 = $675 per/yr SLT + $900 per/yr council rates. ! $1600 total – vs - $30,000 ‘capital gains’
  12. 12. Owners Selling their homes in the June quarter of 2014 after an average hold period of around 10 years !• Boorondara - $519,000 •Whitehorse - $380,000 •Melton - $95,250 •Wyndham - $91,000 ! Gains Over Sep Qtr 2014 !• Balwyn = 16.3% •Thornbury = 16.7% •Mount Waverley = 12.5% !
  13. 13. ! Fewer Australians owning their homes outright (41-31% 1996/2011) ! A rising percentage of long-term tenants renting for a period of 10 years or more (1/3 tenants “long term” 10yrs or more). ! A decrease in the number of low income buyers obtaining ownership, particularly families with children (49% to 33% - 1982/2008). ! A drop in the number of affordable rental dwellings with a marked increase in the number of households in rental stress. (Over 60% of lower-income rental households in Aus in rental stress) ! Greater requirements for public housing. (28% increased demand projected by 2023). ! A rise in homeless percentages and those who drift in and out of secure rental accommodation – with ongoing intergenerational effects. (1996-2011 8% = 89,728 to 105,237)
  14. 14. ! There were 14,659 residential properties with no water usage throughout 2013 (1%), while 64,386 (4.4%) used no more than 50LpD. ! Melbourne’s official vacancy rate is 2.5 per cent (SQM Research) If combined with number of SVs it more than doubles to 6.9 per cent. ! 105,520 transacted residential over the course of 2013 and 92,709 in 2012. ! Only marginally more than the total number of potential residential and commercial SVs at 93,743. ! A figure almost equal to year’s supply of housing turnover lays dormant during a housing supply crisis.
  15. 15. ! ! Dataset and methodology not publicly available. ! ! Analysis done in-house, no oversight. ! ! Not audited by independent third party. ! ! REIV ultimately represents agents, not vendors, buyers or public in general.
  16. 16. Commercial/Industrial Vacancies ! There were 6,207 commercial (non-residential) properties with no water usage throughout 2013 (4.9%), while 29,357 (23.2%) used no more than 50LpD. ! ! In addition to speculation, large retail chains land-bank to prevent competitors increasing market share. ! ! Unused commercial sites also stem from demolition, renovation, industrial zoning constraints, and weak tenant demand.
  17. 17. ! ! The State government has gifted landowners with reduced land tax liabilities – the marginal tax rate is only 2.25% for properties valued at $3million+. ! ! This encourages land and dwellings to be withheld, raising the SV rate. ! ! There is a direct link between the housing affordability crisis for renters/homebuyers and tax expenditures, concessions and exemptions.
  18. 18. ! ! #1: An improved State Land Tax (SLT) is levied on a low flat-rate, no-threshold basis, replacing the current progressive land tax schedule. ! ! #2: Transfer taxes such as conveyancing stamp duties are replaced with a comprehensive SLT. ! ! #3: New estate infrastructure is financed by a bond system – costs are recouped from residents over an extended period, not folded into up-front housing prices.
  19. 19. ! ! #1: Governments must perform extensive analysis of the property market to determine reasons for vacancy. ! ! #2 Enhanced SLT - a low flat-rate no threshold SLT should replace the progressive land tax scale ! #3: ABS takes lead in analysis and reporting of rental vacancy rates (and all property data), not REIV/A or RE firms.
  20. 20. ! ! Many properties potentially and demonstrably vacant that could be placed on the rental market. ! ! High vacancy rate for commercial property. ! ! Property underutilisation or vacancy akin to labour unemployment, generates inefficiencies. ! ! No apparent shortage of houses.

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