Water usage reveals high vacancy rates in Southbank and Docklands
More than 22% of residential properties in Southbank and 11% in Docklands are potentially vacant, according to a survey which monitors water usage.
Across Melbourne there are more than 75,000 potentially vacant properties, according to a report commissioned by social justice organisation Prosper.
Data from Melbourne’s water retailers show 4.4% of Melbourne properties used an average of less than 50 litres of water a day and 0.9% consumed no water for the 2012/2013 financial year.
In July last year a similar report found a vacancy rate of 5.9%. Then Essendon North and Docklands were the most vacant suburbs.
The average resident used 161 litres per day over the same period 2012/13 and the average household used approximately 419 litres per day.
“Landlords have an incentive to withhold properties from the rental market as they profit from rising capital values rather than from long-term rental income,” the report titled Speculative Vacancies in Melbourne 2013 says.
“A substantial land value tax would blunt capital appreciation and serve as a withholding cost, shifting the incentive to profit from rental income rather than capital gain.”
The report says a water leak could be enough to push a property above the cut-off point of 50 litres.
Occupied properties with very low water usage (such as single tenants who frequently travel), properties on the market (both rental and sale), and serviced apartments may dip below the threshold.
But these are counter-balanced by apartment blocks using a single water metre which would hide many unoccupied properties.
The report calls into question the figures published by the Real Estate Institute of Victoria.
“The REIV uses a fragmentary and unreliable rental dataset to calculate vacancy rates. The methodological issues provide, at best, inaccurate findings, and, at worst, severely understated vacancy rates,” it says.
