The Guardian • Issue #2014

The devil in the details of the “housing crisis”

Part 1

Public housing, Pagewood, Sydney. Photo: Public Housing – (CC BY 3.0)

The latest Census figures released by the Australian Bureau of Statistics (ABS) have revealed that Australia had over one million unoccupied houses. This is approximately one-tenth of the 10,852,208 private dwellings counted in the 2021 Census. This figure is particularly jarring as Australia descends further into its housing crisis with rising rents and house prices. A closer inspection of the data released by the ABS provides a small glimpse into the broader problem.

A quick survey of the data shows a neat division into three tiers: 31 per cent of people own their houses outright, 35 per cent own their homes with a mortgage, and 30.6 per cent rent with the rest being unclassified. From this it’d be easy to reach the fairly positive conclusion that over two-thirds of adult Australians either own or are on their way to owning their home. This, however, is an incorrect way of understanding the data as there are an enormous number of variables to consider such as: lone households (25.6 per cent) vs family households (70.9 per cent); the number of adult children living at home with parents; the effects of COVID-19; the number of people who are unhoused and so on. But even taking into consideration these variables doesn’t answer the basic question: how is it possible that there are so many unoccupied houses?

A closer look at the data takes us a step closer to understanding this phenomenon. According to the ABS, out of the 10,852,208 dwellings surveyed:

“[O]ne in five households (twenty-one per cent) owned one or more residential properties other than their usual residence. Of those that owned another residential property, almost three quarters (sixty-eight per cent) owned a single property, while one in twenty-five (four per cent) owned four or more properties.”

The above figures reveal more by what they don’t say than by what they do. One-fifth of private households (2,170,000 plus) own at least one property in addition to their usual residence which means that around 4,340,000 private dwellings, nearly half of the total amount of private dwellings recorded by the Census, are owned by approximately one-fifth of surveyed households. Of that fifth, sixty-eight per cent of those households own a second residential property (around 2,950,000 total dwellings owned). This leaves a remaining twenty-eight per cent of dwellings (1,215,000 plus) divided between households owning between two and three properties, and the final four per cent (173,600 plus) divided between households owning four or more properties. It should be noted that this data doesn’t cover foreign ownership of housing, which in any case only accounts for a small percentage of total ownership, due to the relatively tight control of the Foreign Investment Review Board.

Tucked away amongst additional properties are the aforementioned one million-plus vacant houses. While there can be many motivations for purchasing a second property, ultimately, they serve a singular function: investment. This only poses further, more fundamental questions, which we will discuss over two articles: what does a ‘housing crisis’ mean, what does it look like in this context and how can it be addressed?

The general consensus across the mainstream left is that the solution to this problem is to invest in more affordable and better-quality social housing. The Greens, for example, have promised to build over one million such homes to tackle homelessness, drastically reduce wait times for public and social housing, and to give young people better access to more quality and affordable homes. They also take aim at structural causes of this problem by proposing to end tax breaks for investors, winding back negative gearing and the capital gains tax discount, and introducing rent controls to “ensur[e] security of tenure by backing in European-style long-term leases.”

While these reforms are welcome and do target some of the structural issues like negative gearing and capital gains tax, like all reforms they can only partially alleviate the problem and are also subject to potentially being reversed. Building more social housing ignores the fact that we already have more than enough unoccupied houses to house those who are unhoused and those on social housing waiting lists. We need to abolish the ownership of housing for financial gain, and instead redistribute it to satisfy social need. Part two of this article will analyse the consequences of this fundamental imbalance in the housing market.

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