Local market experts believe large numbers of vacant Melbourne homes recorded at the last Census are now being used at least part time. Picture: Jason Edwards.
As Melbourne was becoming the world’s most locked-down city in 2021, tens of thousands of residences across Victoria were sitting empty — up to 75 per cent of homes in some suburbs.
Market experts today have revealed they believe those figures have since plunged, and that in a cruel twist, more homes will need to sit vacant to encourage the rental market to stabilise.
The 2021 Census revealed as much as 75 per cent of properties in coastal hamlets and holiday home hotspots were sitting vacant.
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As many as 30 per cent of inner-city apartment markets were also left empty, while area’s from Footscray to St Kilda had one in five homes sitting empty.
But real estate experts believe the number of truly empty homes have since dropped dramatically as interest rates have surged, land tax has increased and the state’s rental affordability crisis reached a decade high.
The latest Census figures collected three years ago found anywhere from 24-31 per cent of units across Melbourne’s CBD, Docklands and Southbank were sitting empty.
Barry Plant Yarra’s Edge branch manager Geoff White estimated the figure today was closer to 10-15 per cent — and most of those would be homes that were for sale or that were about to be listed.
![801/1 Balston St, Southbank - for herald sun real estate](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
801/1 Balston St, Southbank, is being sold by an investor cashing out of the market.
“The real number of properties vacant would be quite a bit lower now,” Mr White said.
“I’d be surprised now if it was up above 10 or 15 per cent, we just aren’t seeing it as agents.”
The agent said beyond normal holding costs, apartment owners were also being hit with higher owners corporation fees that had forced many once empty residences onto the rental market.
“Empty homes would now be isolated to a number of newer buildings that have just been completed where there’s higher ownership from overseas buyers who are looking to move it on,” Mr White said.
“And with current tenant legislation, it’s far easier to sell a vacant home than a tenanted one.”
He added that investors were now a “worryingly” small chunk of buyers across Melbourne’s CBD and surrounds, with first-home buyer numbers higher.
1401/60 Lorimer St, Docklands, is also being sold by an investor who has it staged – but vacant as they await a new buyer.
PropTrack economist Paul Ryan agreed it was likely urban areas like Melbourne’s CBD and Docklands had shifted to having more homes tenanted, or being lived in by an owner buyer, since the last Census data was recorded.
Mr Ryan said while wider Melbourne’s unit vacancy rate had reached as high as 12 per cent at the height of pandemic-era, latest figures showed it was currently 2.4 per cent.
House vacancies were even lower at 1.1 per cent, in part because more renters are opting for sharehouses to cut back on accommodation costs.
“A lot of people today are being asked to pay $100 a week more, and the fact that they know the vacancy rate is so low means tenants will just pay it rather than chance searching for another,” Mr Ryan said.
“But we absolutely need to see rental vacancy rates increase to 3 per cent to see better conditions for renters.”
In 2021, more than one in five residences in urban suburbs from Footscray and West Melbourne to South Yarra and St Kilda were unoccupied in 2021.
McGrath St Kilda’s Michael Townsend said those figures had been buoyed by short-stay accommodation and even serviced apartments.
9/7 Alfred Square, St Kilda, is for sale at $459,000 but was last listed for rent in 2022.
Mr Townsend said most of those owners had since sold their investments, or converted them to long-term rentals, after watching them sit empty across much of 2021.
Today, he said there was a rise in new investors looking at listing homes as short-term rentals to cash in on high demand around the Grand Prix and other major events — though they were still a small number.
“It is definitely possible we will see more homes coming back to that short term stay market,” Mr Townsend said. “But they will be newer investors.”
He estimated there would be closer to one in 20 homes sitting empty today, about 5 per cent, and most of them would be for sale or being prepared for sale.
As Melbourne was grappling with its final lockdowns, almost one in five Toorak homes were sitting empty.
Today, RT Edgar Toorak managing director Jeremy Fox said areas like Toorak and South Yarra would be better described as having homes that were “underused”.
In many cases those that were vacant were ex rentals being sold off by landlords unimpressed by land tax law changes.
2/705 Orrong Road, Toorak, is for sale at $1.7m, but was last listed for rent in 2020.
“A lot of the international buyers come to Australia and Melbourne as a fantastic place to live and educate their children, but they have businesses everywhere — from London to Beijing,” Mr Fox said.
“The homes all have furniture in them, the owners just travel a lot. I never see a truly vacant property unless it’s being renovated.”
But the highest numbers of vacant homes are likely to be in areas with big numbers of holiday homes.
MANY HOLIDAY HOMES REMAIN VACANT, BUT SELL UP IS ON
Venus Bay near Phillip Island and Portsea on the Mornington Peninsula are the areas with the highest number of homes vacant at the last census, with about 75 per cent of homes sitting empty on the day.
But PBE Real Estate Venus Bay’s Colleen Reeves noted it was quite probable that with a lockdown in place at the time of the last Census, many people who fled Melbourne to their holiday home would have lied and said they were at their suburban home.
Ms Reeves added that the pandemic had also changed the way people used their getaways in the area, and many owners were now “part time” residents of Venus Bay who came down on Thursday night and worked from their holiday home on Friday and Monday.
56-58 Anita Crescent, Venus Bay, is for sale at $650,000 and could be a ‘part time’ residence for a Melburnian looking to escape the big smoke four days a week.
“There are not as many homes unoccupied as there were — we would think there are now a few hundred part timers,” she said.
Mr Fox noted that for Portsea, land tax changes had forced a number of sales and was changing the fabric of the town as only the “very wealthy” could afford to hang onto beach homes.
He added that the tax tweak had inadvertently become “discriminatory”, as while married couples could not own separate residences — couples who hadn’t tied the knot could each own a property, making it easier for them to retain multiple homes.
“It’s highly discriminatory to have husband and wives only being able to own one house, but unmarried partners being able to own one each,” Mr Fox said.
Mr Ryan said that filling empty homes wasn’t necessarily a significant solution to the housing crisis as while it might provide a “small uptick in housing availability” it was a “one-time thing”.
“Building more homes and encouraging empty nesters to downsize are the two big things that would move the needle the most,” Mr Ryan said.
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