There are thousands of ‘zombie’ homes in Australia – and they could hold the key to the country’s rental crisis.
There could be one in your area.
Simply put, ‘zombie’ homes are property that is empty or not used 100 percent of the time.
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“No one is renting it…No one lives in it,” Finder financial expert Rebecca Pike told 7NEWS.com.au.
And they’re widespread – last year’s census revealed there were more than a million vacant homes, although that was at a time when much of the country was on lockdown and borders had been closed for more than a year.
But with rents soaring in Australia and tenants struggling to find a roof over their heads, these ominous properties could drive up prices – and rob rental properties from desperate families.
Governments across the country are cracking down on zombie homes and making them available to renters, but experts say more can be done.
What is a zombie house?
It may be a terrifying term, but the idea of ”zombie” homes came out in a much milder way than their name suggests.
Can include short-term rentals and vacation homes – Investors may choose to rent out their property short-term to earn more money and have some flexibility.
“It seems safer to have Airbnb renters for a few days at a time, or a week, or two weeks — there’s little wear and tear to worry about,” Pike said.
There is more money to be made.
“The other side is that you can just get more money for Airbnb. So what you might get from a week’s rent, you can get on the weekend.”
But while there are benefits for investors, converting real estate to short-term rentals means there are fewer homes for rent, Pike said.
This is a problem at a time when residents have been pushed out of the rental market as demand grows and rents increase – forcing some to live in their cars or stay in a caravan while finding rent.
“Investors are putting up their properties for Airbnb, but it is taking rental properties away from the tenants and the lack of … properties available for rent is driving up demand and prices,” she said.
Why doesn’t the angel want to change course
Melbourne property investment advisor Guru Gupta understands the challenges of the rental crisis.
He has an Airbnb on the Gold Coast that doubles as a vacation home, and he’s in the process of converting his second property to Airbnb.
Gupta said he bought the Gold Coast property – a four-bedroom, two-bathroom home – because it would have less impact on the rental market.
“Not all people need four beds, two bathrooms in the house for just one family,” he said.
“That’s why we bought Airbnb and it’s not really going to affect a market that’s in crisis.”
He and his family fly to the Gold Coast and use the property about every two months. Gupta said that every other weekend, travelers book it.
“It’s not like I’m sitting empty, it’s only empty some days of the week,” he said.
“Usually, two families want a family reunion or get together… at least they have a house because it is a beautiful four-bedroom home with a private pool.
“It is cheaper for them to use our house than to use the hotel.
“With the second property, there was a long-term tenant there, but he wanted to go and buy his own property.”
Using the property as an Airbnb generates 10 to 20 percent more income than getting a long-term rental.
“[And]it gives us the ability to use the house as a vacation home whenever we need to,” he said.
Brisbane-based Raine Gaisford knows there are difficulties in the rental market, but she needs her investment property listed on Airbnb.
She and her husband bought an investment property in Noosa last October, which they were planning to use as a vacation home they would eventually move into – but that got too expensive with the mortgage.
Instead, they listed the property on Airbnb. They are now booked about 50 percent to 60 percent of the time.
“It’s not really about trying to take a profit. It’s really 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 lease.
“We’d be at a huge loss…if we rented it out as a long-term lease.”
The spouses use the property when they can, but need to rent it out “for a significant portion of the year in order to service (the loan)”.
what should be done?
Ray Ellis, CEO of First National Real Estate, said that while short-term rentals are contributing to the rental crisis, investors and Airbnb owners are not to blame.
“You can’t blame the consumer or the landlord because they see it as a return on their investment,” Ellis told Money News.
“If we have a good property in a regional city or near the beach or even in central Sydney, that makes $800 a week — if you can get $1,000 for the weekend, without… renters, it’s an easy financial decision to make. “.
Instead, Ellis said, the burden should fall on state governments.
Across the country, local councils and state governments have introduced rules and restrictions on short-term rentals.
In Brisbane City Council, a 50 per cent surcharge will be charged to owners who list residential properties on short-stay sites on the current rate bill.
“Brisbane has so many great hotels and so many are under construction, our suburban streets weren’t supposed to be home to inns with different tenants every week,” Brisbane Mayor Adrian Schreiner said in June.
“I hope that instead of paying more, many more landlords will return these homes and apartments to the long-term rental market, which will help alleviate our housing shortage.”
Across the border in NSW, landlords who rent out their property for short stays must register their property with the state government and comply with a code of conduct.
In Greater Sydney and many regional areas, non-hosted short-term rentals – where the owner is not residing in the property – are limited to renting out their property for 180 days per year.
However, more needs to be done to help ease the rent crunch.
“Australia has not built enough homes,” Ellis said.
“As a government – state or federal – in the post-war period, the late 1950s and early 1960s, we built approximately 240,000 of what we would call social housing properties in those days.
They were full and since then, no country has made the same commitment to it.
“State governments must address it.”
Pike, a Finder Money expert, said the rental crisis was expected to get worse over the coming months, and agreed it needed urgent action.
“We are definitely seeing a rise in rental housing demand because we have more people coming into the country, while during COVID we really saw that decline,” Pike said.
“There is definitely more demand at the moment, but there is also less supply.
“Also with the RBA cash rate, if investors pay more for their loans, they are likely to pass that on to the tenants.
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