News

Rent in Australia: How ‘zombie houses’ are contributing to the country’s rental crisis

There are thousands of “zombie” houses in Australia – and they could hold the key to the country’s rental crisis.

There could even be one in your neighbourhood.

Put simply, “zombie” houses are properties that are sitting empty or are not being used 100 per cent of the time.

Watch the latest News on Channel 7 or stream for free on 7plus >>

“No one is renting them … no one’s living in them,” Finder money expert Rebecca Pike told 7NEWS.com.au.

And they are widespread – last year’s census revealed there were more than 1 million unoccupied dwellings, although that was during a time when much of the country was in lockdown and borders had been closed for more than a year.

But with Australia’s rents soaring and tenants struggling to find a roof over their heads, these ominously termed properties could be pushing prices up – and taking away rental properties from desperate families.

Governments around the country are working to clamp down on zombie homes and make them available for renters, but experts say more can be done.

What is a ‘zombie’ house?

It might be a terrifying term, but the idea of “zombie” houses came about in a much more benign way than their name suggests.

They can include short-term rentals and holiday homes – investors may choose to rent their property out short-term to make more money and have some flexibility.

“It seems safer to have Airbnb tenants just for a few days at a time, a week, couple of weeks – there’s less wear and tear to worry about,” Pike said.

And there’s more money to be made.

“The other side is you can just charge more money for an Airbnb. So, what you might get in a week’s rent, you can get in a weekend.”

But while there are benefits for investors, turning properties into short-term rentals means there are fewer homes up for rent, Pike said.

And that’s a problem at a time when residents have been priced out of the rental market as demand grows and rents increase – forcing some to live in their cars or stay in a caravan while they find a rental.

“Investors are putting their properties out for Airbnb, but it’s taking rental properties away from renters and that lack of … properties available to rent is driving demand and prices up,” she said.

Why landlords don’t want to change tack

Melbourne property investment adviser Goro Gupta understands the challenges of the rental crisis.

He has an Airbnb on the Gold Coast that doubles as a holiday home, and is in the process of turning a second property he owns into an Airbnb.

Gupta said he purchased the Gold Coast property – a four-bedroom, two-bathroom house – because it would have less of an impact on the rental market.

“Not all people need a four bed, two bath home for just one family,” he said.

“That’s why we purchased an Airbnb which wouldn’t really be affecting the market which is in crisis.”

He and his family fly up to the Gold Coast and use the property about every two months. Every other weekend, it’s booked out by travellers, Gupta said.

“It’s not like it’s sitting empty, it’s just empty on some of the weekdays,” he said.

“Typically, two families that want to have a family reunion or get together … at least have a house because it’s a nice four-bedroom house with a private pool.

“It’s cheaper for them to use our house than a hotel.

“With the second property, there was a long-term renter in there, but he wanted to go off and buy his own property.”

Using the property as an Airbnb generates about 10 per cent to 20 per cent more income than having a long-term rental.

“(And) it gives us the ability to use the house as a holiday house whenever we need to,” he said.

Brisbane resident Raine Gaisford knows there are struggles in the rental market, but needs her investment property listed on Airbnb.

She and her husband bought an investment property in Noosa last October, planning to use it as a holiday home that they would eventually move into – but that became too expensive with their mortgage.

Instead, they listed the property on Airbnb. It is now booked out about 50 per cent to 60 per cent of the time.

“It’s not a matter of us trying to make profit. It’s actually just about trying to pay the mortgage,” Gaisford said.

“We wouldn’t be able to service the mortgage if we didn’t have it as a short-term rental.

“We’d be making quite a significant loss … if we were to rent it out as a longer-term rental.”

The couple uses the property when they can, but need it to be rented out “for a good portion of the year in order to service (the loan)“.

What needs to be done?

While short-term rentals do contribute to the rental crisis, investors and Airbnb owners are not to blame, First National Real Estate CEO Ray Ellis said.

“You can’t blame the consumer or the property owner because they see it as an investment return,” Ellis told Money News.

“If we’ve got a good property in a regional town or close to the beach or even in inner Sydney, that’s getting $800 a week – if you can get that $1000 for the weekend, without … having long-term commitment with tenants, it’s an easy financial decision to make.”

Instead, the onus should be on state governments, Ellis said.

Across the country, local councils and state governments have introduced rules and restrictions on short-term rentals.

In Brisbane city council, owners who list residential properties on short stay websites will be hit with a 50 per cent surcharge on their current rate bill.

“Brisbane has plenty of great hotels with many more under construction, and our suburban streets were never meant to be home to mini hotels that house different tenants every week,” Lord Mayor Adrian Schrinner said in June.

File image of residential houses in Sydney. Credit: Getty Images

“It is my hope that instead of paying extra, many owners will return these houses and apartments to the long-term rental market, which will help ease our housing shortage.”

Across the border in NSW, owners who rent out their properties for short-term stays must register the accommodation with the state government and comply with a code of conduct.

In Greater Sydney and several regional areas, non-hosted short-term rentals – where the owner does not reside at the property – are limited to renting their property out for 180 days a year.

Still, more needs to be done to help ease the rental crisis.

“Australia hasn’t built enough houses,” Ellis said.

“As a government – state or federal – in the post-war period, the late ‘50s, early ‘60s, we built almost 240,000 of what we called social housing properties in those days.

“They were full and since then, no state government has made the same commitment to it.

“State governments must address it.”

Finder money expert Pike said the rental crisis is expected to get worse over the coming months and agrees it needs urgent action.

“We’re definitely seeing that demand for rental housing going up because we have so many more people coming into the country, whereas during COVID we really saw that drop,” Pike said.

“There is definitely more demand at the moment, but there’s also less supply.

“Also with the RBA cash rate, if investors are paying more for their loans, they’re potentially passing that on to renters.

Shocking moment Pitbull attacks prized horse.

Shocking moment Pitbull attacks prized horse.

Source link
[the_ad id=”1767″]

Leave a Reply

Your email address will not be published.