Key Points
- Statistics show about one in 10 homes may be vacant at any one time in Australia.
- While some of these homes being vacant for a short period can’t be avoided, others are being kept vacant on purpose.
- Land banking, the probate process and short-stay accommodation are all factors in so many homes being underutilised.
Ever wonder about that vacant house nearby and why, in a housing crisis, there appears to be a property sitting unused?
Kristie Hannah, who posts real estate and finance content on her X (formerly Twitter) profile, received hundreds of comments after sharing a video of a property in Perth she said had been vacant for two years.
Despite the oddity of a house with no furniture and an untouched front yard sitting vacant for so long, it’s not completely out of the ordinary.
Statistics show about one in 10 homes may be vacant at any one time in Australia.
So in the current situation, where more housing is greatly needed according to experts, and the federal government, what can be done to make use of the housing stock that already exists?
Australia’s housing crisis
and increasing housing costs are causing financial distress, and for an increasing number of people, but still other properties are being underutilised.
Government agency Housing Australia has forecast there will be an under-supply of more than 100,000 homes over the next five years.
suggested about one million Australian homes were unoccupied, which equated to a rate of around 10.1 per cent.
Some of these homes being vacant for a short period around Census night is easily explainable. Residents could have gone away for a few days. The property could have been sold or re-let, and Census night fell after tenants had moved out but before new tenants had moved in.
What is land banking?
“There are properties that are just being held as investments or for other reasons, and not occupied in any meaningful way and those are the ones that we should be concerned about,” Australian Housing and Urban Research Institute (AHURI) managing director Michael Fotheringham said.
He described a practice known as ‘land banking’.
“Essentially the rationale behind it – although it’s not entirely rational to most – is the capital gain on that property is what the investor is looking for and while they could attract a rental yield, having a tenant in it introduces potential for wear and tear on the property,” Fotheringham said.
Home ownership has been pushed out of reach for an increasing number of Australians. Source: Getty / Andrew Merry
While Fotheringham said it may not be the “best way to get bang for your buck out of an investment property”, it was a tactic a small number of investors used.
“There’s also a challenge for some foreign investors and their ability to lease out properties due to tenancy regulations, sometimes it’s someone who’s moving from overseas who has yet to arrive,” he said.
“The Census doesn’t tell us how many of the vacant houses fall into that category.”
The Victorian government recently in an effort to encourage those with vacant properties to make use of them.
As of 2025, any home left vacant for more than six months in that state would attract a tax of one per cent of the property’s improved value, meaning a vacant home with a value of $500,000 would be taxed $5,000.
Fotheringham said he did not think the tax would have a big impact.
“That’s a fairly low-level tax that probably doesn’t do a lot to really change behaviour, but they’re starting to tighten up on it and other states are looking at vacancy taxes as well,” he said.
Airbnb and Stayz
Hundreds of thousands of Australian homes are understood to be listed on short-stay rental accommodation sites and could account for a big portion of the million homes identified as vacant in the last Census.
“The line from most of these platforms is often just that someone is ‘renting out their spare room, it’s a good thing,’ but overwhelmingly, it’s not spare rooms, it’s whole properties, and overwhelmingly it’s properties that either used to be or could be on the private rental market,” Fotheringham said.
“If those platforms didn’t exist, there’s likely to be a six-figure sum of properties that would be returned to the private rental market,” he said.
Earlier this month, the Western Australian government announced multiple changes in an attempt to regulate the short-term rental market.
In a bid to entice property Western Australian property owners to place their short-stay properties on the market as long-term rentals, the state government has introduced a $10,000 incentive payment.
Under the scheme, those who had an entire property on short-stay booking platforms such as Airbnb or Stayz within the six weeks leading up to November 9 are eligible for the payment if they provide a minimum 12-month lease agreement to a new, long-term tenant.
Renovations and legal matters
Fotheringham said delays in legal processes around property ownership can often tie up a property and keep it vacant for periods.
“Some of them are contested ownership where there’s an estate or something, and there’s a legal battle around it,” he said.
Australian law firms dealing with deceased estates tell prospective clients it can take six to 12 months for
Homeowners often have to relocate when they have major renovations carried out in their home, such as the type encouraged under the HomeBuilder grants. Source: Getty / tracielouise
Another reason for properties not housing anyone can be because they are undergoing a major renovation, such as those
Owners often have to relocate while work is underway, with some renting another home for a period.
Underutilised housing in Australia
Statistics show while there is a small portion of overcrowded housing in Australia, a bigger portion is underutilised.
While some were critical of former Reserve Bank of Australia governor Philip Lowe’s suggestion earlier this year that to keep up with the increasing cost of housing, there are plenty of spare rooms that could potentially be made use of.
Data from the Australian Bureau of Statistics revealed 77 per cent of households had at least one bedroom spare in 2019-2020.
The suitability of a household’s dwelling size was measured using the Canadian National Occupancy Standard, which measures suitability based on whether a dwelling has enough bedrooms for the size and composition of a household.
This measure was also utilised by the in its analysis of data from 2022, which showed 17 per cent of public housing properties were being underutilised.
