This article is from the Australian Property Journal archive
THE number of unoccupied dwellings in Sydney has doubled in just six years to more than 200,000 homes, according to real estate group Starr Partners.
Starr Partners CEO Douglas Driscoll said the full impact of foreign investment on Australia’s housing crisis is yet to be seen across the eastern seaboard and has called on a tax to be introduced for investors who leave a dwelling vacant.
In 2011, the Australian Bureau of Statistics estimated that there were almost 120,000 unoccupied dwellings in Sydney alone.
Driscoll said in the six years that have followed, foreign investment in property has risen exponentially and completely transformed the market.
“From my own rudimentary research, I truly believe that the recent advent of foreign investment has contributed to this figure almost doubling. Foreign investment in our property sector only gained genuine momentum in 2012 and in just a few short years we are already seeing 10-20% of property being sold in some pockets to offshore buyers,” he added.
“Foreign investment is not the elephant in the room, it is a herd of elephants in the room and more needs to be done.
“We need to start addressing the prevalence of empty homes and recognise its impact on the mounting affordability crisis. In the first instance, at the very least, these properties should be offered for rent, but if they were to hit the open sales market, it would certainly help alleviate the scarcity issue we are currently facing,” he continued.
Driscoll said while local residents struggle to purchase, offshore buyers have properties lying dormant and he has called on the government to introduce taxes to discourage the practise.
“Investors don’t get capital gains tax concessions if the property is uninhabited for more than 12 months, which is a good start, but what about non-residents?
“I think the government should introduce significant financial penalties or inordinate property taxes for any property owned by a non-resident that is known to be empty for more than 12 months – to put unoccupied properties back on the market for residents to purchase or rent,” he said.
“Holiday homes aren’t the problem here, because quite often they are located in regional areas outside of our metropolitan cities most affected by the affordability crisis: Sydney, Melbourne and, to a less extent, Brisbane. Offshore buyers purchase property in our metropolitan areas because they are perceived as high growth areas, but also because we have the highest living space per capita than anywhere else in the world.
“I’m certainly not against foreign investment or property investment as a whole, but I do believe it has led to the market becoming hugely out of kilter, causing a multitude of social and economic issues. We need a thorough review on this because the social divide will only continue to grow. Almost $7 trillion of our entire economy is related to real estate, and while I acknowledge that foreign and local investment has played a pivotal role, it shouldn’t be at the expense of the everyday Australian,” Driscoll concluded.
Australian Property Journal
