People sometimes worry that investors (or foreigners) are buying up properties and leaving them empty, speculating on capital gains instead – but if this is happening at all, it seems to be on a very minor scale. In a post last year, I looked at unoccupied homes in Auckland and other NZ cities, using census data. Most of them, including Auckland, had similar percentages of unoccupied homes – roughly 5% to 8%.
In this post, I’ve dug deeper, looking at the unoccupied homes figures for each Auckland suburb. I’ve also put together an interactive map showing the percentage of unoccupied homes for each area:
Across the Auckland region, there were 33,201 unoccupied dwellings on census night 2013. This sounds like a lot, but as per my earlier post, the fraction of homes that are vacant is pretty similar to other NZ cities, and to the other ‘snapshots’ taken in the 2001 and 2006 censuses.
Unsurprisingly, there are plenty of vacant homes on some of our offshore islands – Kawau, Great Barrier, Waiheke, with around 2,500 between them. Most of these, of course, are used as baches.
Most of the other ‘ghost areas’ are also bach hotspots – the highest percentage of vacant homes are in places like Leigh, Omaha, Snells Beach, Waiwera and Point Wells. Around 2,700 vacant homes are in these northern holiday/ lifestyle areas.
Still, most vacant homes in the Auckland region are in the urban area. This is what we’d expect given that’s where most of Auckland’s 507,000 dwellings are.
Within the city, Hobsonville stands out as an area with a lot of empty homes, presumably because many of the homes have just been built and not yet occupied. In fact, the Hobsonville East area unit had 363 occupied dwellings, 120 unoccupied, and another 18 under construction. That construction figure seems implausibly low, so my guess is that many of the “unoccupied” homes hadn’t actually been completed and certified yet, even if they looked habitable.
Auckland Central has 2,200 unoccupied dwellings, according to the 2013 census. It’s quite common for CBDs to have lower occupancy rates, due to several different factors:
- With a ready market of people wanting to stay in the CBD for a night, a week or a month, apartments are more likely to be rented out as short-term accommodation than a house in the suburbs
- Some people can afford to keep a CBD apartment for weekday or occasional use, and spend the rest of the time in a house elsewhere in Auckland, or somewhere else in New Zealand, or even overseas.
- Although legally everyone is supposed to fill out a census form, not everyone does. The ‘response rate’ is likely to be lower in the CBD (language barriers, privacy desires, age cohort factors etc), plus it’s harder for the census collectors to tell whether an apartment is occupied or not, compared to a house. Some apartments will have been incorrectly tagged as ‘unoccupied’.
In my previous post, I quoted North & South magazine, who give “Mt Albert and Mt Eden, Grey Lynn and Herne Bay” as examples of suburbs where ‘ghost houses’ are apparently common. But the census data doesn’t show that at all. Most of these suburbs are spectacularly normal. They have vacancy rates at very typical levels, in line with the averages for Auckland and other NZ cities. Herne Bay is slightly high at 9.1%, but it was 9.3% in 2006 and 7.9% in 2001. And those ‘higher’ rates seem to be typical for the wealthiest suburbs – Remuera is similar.
I initially thought that wealthier suburbs might be more likely to have unoccupied homes – since people living there might have more mobility, travelling overseas for example. However, there’s no evidence of this in the data. I’ve done a few really basic regressions, all of which fail to show a relationship between incomes and the percentage of unoccupied homes. Here’s one example:
Finally, I’m open to the idea that the number of empty homes has crept up since the 2013 census – that this is becoming an emerging issue – but it doesn’t seem likely. We’re not building enough homes, and there’s plenty of demand from people looking for places for to live (giving rise to issues like overcrowding). If anything, there’s more incentive to rent out an empty house now than there was in 2013. My two cents is that we need to put our energies elsewhere if we want to get the housing market into better shape.
New Zealand isn’t the only place to be concerned about empty homes. This article from Sydney uses 2011 census data for the city, similar to what I’ve done here. And this article from Melbourne uses a methodology I quite like – they’ve estimated the number of empty homes, based on homes with abnormally low water usage.