There are more than a million empty homes in Australia, but despite commentators slamming it as “cruel and immoral”, a new analysis suggests there hasn’t been a significant spike in investors leaving their properties vacant.

At the time of the 2016 census, 11.2 per cent of all dwellings in the country were vacant and property prices and rent costs had surged in many of the east coast’s property markets.

But an analysis of the data released on Wednesday by SGS Economics & Planning economist Terry Rawnsley found there “does not appear to be a large pool of dwellings withheld from the housing market”.

When census came knocking, more than one in 10 homes was empty. Photo: Eddie Jim

Instead, he pointed to “valid reasons” for unoccupied homes, including new constructed homes yet to be occupied, homes for sale or under offer, properties being renovated or awaiting demolition and deceased estates.

It could also be due to the residents simply not being at home on census night, or the property being temporarily untenanted.

The 11.2 per cent was 0.5 percentage points higher than the 2011 census result, with the past 35 years’ worth of census data showing about 10 per cent of homes were consistently vacant at the time of the national survey.

The 2016 result was the highest recorded over the time period analysed by SGS Economics – from 1981 to 2016.

After similar results were found in the 2011 census, community groups called for major councils to consider hiking council rates for owners who leave their homes vacant. Similar policies have been seen in Britain’s Camden, where homes vacant for more than two years face a 50 per cent premium, and Canada’s Vancouver.

In the tough Sydney and Melbourne rental markets, empty nesters holding onto large homes with vacant rooms have also come under scrutiny.

“With the 2016 census being broadly in line with historical levels we can’t blame investors intentionally leaving homes vacant or the rise of Airbnb [for high rents and property prices],” Mr Rawnsley said.

Foreign property owners are now subject to a vacancy tax for any homes kept vacant for six or more months a year.

While a tax could bring more homes onto the market, Mr Rawnsley said it “would only be a very, very small percentage” and, typically, capital cities had a lower proportion of empty homes.

“Half of unoccupied dwellings are in regional areas, which really doesn’t fit the narrative of investors leaving properties vacant just for capital gains,” he said.

Greater Sydney’s 7.3 per cent of vacant homes was the lowest nationally. While the inner suburbs had higher rate of 9.5 per cent, this fell well below the rate in regional areas such as Shoalhaven, where 26.1 per cent of homes were empty on census night.

In Greater Melbourne, the rate was 9.1 per cent – but in many of the inner suburbs 11.1 per cent of homes were vacant. On the Mornington Peninsula this was double – at 22 per cent – due to holiday homes and short-term rentals.

And in Greater Brisbane, 7.6 per cent of homes were vacant compared with 11.7 per cent in regional Queensland. 

Domain Group chief economist Andrew Wilson said he didn’t see any reason why there would be more vacant houses proportionally than in the past, other than a surge in holiday home purchases.

“The northern rivers [in NSW] has seen strong growth, as has Shoalhaven and Shellharbour,” Dr Wilson said.

But he did see some cause for scrutiny when it came to apartment vacancies. In 2015 and 2016, dwelling approvals and commencements hit a record high, but this won’t translate into new homes in the market – nor those counted in the census – until the building is completed.

“The jury is still out and with completions now coming through there will be some international investors who have no interest in looking for a tenant … any story of empty properties has to be the apartment market,” he said.

A vocal critic of the rising rate of vacant homes, University of NSW professor of housing research and policy Hal Pawson, said the rate of empty homes had seen a “modest” rise in the past five years.

“What the census showed was that the national snapshot total of empty homes was 200,000 higher in 2016 than in 2006.

“However, much of that will have been the result of an overall expansion of the housing stock,” Mr Pawson said, noting “much” of Greater Sydney’s additional 18,000 empty homes was a reflection of the expanding size of the city.

But he maintained the census was a “poor instrument” to monitor the scale of the vacant housing issue and only provided the broad trend over time, despite previously saying it was “cruel and immoral” to keep homes empty in the midst of a housing crisis.

“When governments wake up to the fact that we need to make more effective use of the housing stock we already have, they will also need to devise much better methods to monitor the number of empty homes, and to differentiate long term ‘speculative vacancies’ from infrequently used second homes and other components of the overall total,” he said.

Sydney’s rents over the past 12 months to June increased 4.8 per cent for apartments and 3.8 per cent for houses, Domain Group data shows, despite a surge of apartment developments.

In Melbourne, house rent jumped 5 per cent and apartment rents were up 5.3 per cent over the same time period.