Auckland ghost houses increasing but no one knows why, expert says

About 40,000 Auckland homes sat vacant last Census night – equivalent to every home in Lower Hutt being left empty – yet officials appear no closer to knowing why, a planning expert says.

Auckland mayor Phil Goff last year proposed filling vacant houses with homeless tenants or with nurses, police and other essential workers, yet nothing concrete had come from the plan.

The 2018 Census showed 18 per cent more vacant dwellings in Auckland compared with the 2013 Census when 33,360 were vacant.

Many are holiday homes or were temporarily vacant on Census night.

But a portion are “ghost houses” – deliberately left vacant by long-term investors who wanted capital gains without having to manage tenants.

Auckland Council planning committee chairman Chris Darby said with the city facing a housing shortage, it was important to know why the homes were empty.

Yet it didn’t appear thorough research was being done into discovering why.

“There appears quite a significant number of habitable homes that could be accommodating Aucklanders that are not being utilised,” he said.

“Are there valid reasons for this unoccupied number, which is trending higher, or are there concerns that we should be delving into?”

With sale and rental prices rising, Auckland is a city desperately in need of more homes.

City sale prices leaped 25 per cent, from $920,000 in June 2020 to a record high of $1.15 million last month, the Real Estate Institute said.

A typical home now costs nine times the city’s typical annual household income, according to CoreLogic and fellow analysts Infometrics.

And although some pundits speculate house price growth is slowing, there are fears home loan interest rates may soon begin to rise and put another barrier in the way of those wanting to buy.

Darby said planners are already trying to tackle the sky-high prices by helping make it easier for more homes to be built.

Yet they needed to also consider every part of the equation, including ghost houses, he said.

However, Housing Minister Megan Woods said it was important not to “overstate” the issue.

Homes could be recorded as unoccupied on Census night for a variety of reasons.

That included homes sitting empty because they were being renovated or were between a change of tenants, or simply that the owners were away that night, she said.

She pointed to a 2015 study in which electricity provider Vector found around 8000 Auckland homes – or 1.6 per cent of all dwellings at the time – were unoccupied, meaning they had used less than 400W of power a day for 100 days or more.

That was significantly less than the approximately 33,000 homes listed as unoccupied in the Census two years earlier.

The National Party’s housing spokeswoman Nicola Willis said she had also heard anecdotally some landlords were reluctant to put tenants in their rentals because new laws had made it harder to evict anti-social renters.

However, she said Labour had hired 1200 extra public servants at state housing provider Kainga Ora and the Ministry of Housing and Urban Development since coming to power.

“What is obvious is that the Government has more than enough housing advisers to come up with some answers,” she said.

Mayor Goff said any measure that might increase the supply of city homes was worth investigating.

Last year, he proposed that electricity company Vector could find out which houses had not used power for more than six months.

The owners of these homes could then be encouraged to make their houses available to tenants, with the job of managing the tenancies being taken over by non-profit community housing groups or government bodies.

“This would benefit the landlord in terms of providing a financial return on what would otherwise be a vacant dwelling and help in alleviating a rental housing shortage,” he said.

Although that proposal had yet to yield results, he said a wider study was in the works.

“I understand that the Government has funded an independent feasibility study into the issue of empty homes across New Zealand, and I look forward to seeing the results of this work,” he said.

The issue of empty homes was also studied by The Tax Working Group set up in 2018 to look into ways to reform the tax system.

It referenced a vacant property tax in Vancouver, Canada that had recently been introduced, as well as taxes in Melbourne and elsewhere.

The group concluded that it was too early to decide whether the taxes had helped increase housing supply or not.

It recommended the Government do no further work in considering a tax on owners of empty homes but instead keep an eye on Vancouver’s tax to monitor its success or otherwise.

According to the Census data, the Auckland Council local board areas with the highest percentage of vacant homes were all holiday home hotspots.

That included Great Barrier Island (51 per cent), Waiheke (36 per cent) and Rodney (16 per cent).

Yet the inner-Auckland area of Waitematā was next highest with 11 per cent of homes being vacant. Affluent Orakei and Devonport-Takapuna also had high vacancy rates.

Among the most high-profile homes to sit empty of late is the glamorous mansion formerly owned by ex-Prime Minister Sir John Key.

The Keys sold the house for $23.5m in 2017 to a buyer reportedly out of China, but neighbours said they are yet to see anyone move in since the sale.

Now some worry the home is being neglected and bringing down the feel of one of the city’s poshest streets.

Darby said although homes owned by the richest Kiwis and foreigners are unlikely to be rented out, the Census suggested many smaller homes were being left empty.

“The evidence is signalling to us that there is a growing number of unoccupied dwellings showing up in Auckland,” he said.

“Is this being understood or is it being ignored?”

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