The 2018 census showed that the number of vacant Auckland houses had risen 18 per cent to 40,000. Photo / File
The 2018 census showed that the number of vacant Auckland houses had risen 18 per cent to 40,000. Photo / File
The high number of vacant properties in Auckland's CBD is being blamed on investors who are holding on to "lock-and-leave" apartments despite chronic housing shortages in the city.
The 2018 census showed that the number of vacant Auckland houses had risen 18 per cent to 40,000. That compares to a 0.1 per cent increase in the previous census period.
Empty properties now made up 7.3 per cent of Auckland's private dwellings, compared to 6.6 per cent in 2013.
Auckland Council chief economist David Norman said that was the second lowest vacancy rate for any main centre in New Zealand. Most of the empty houses were easily explained, he said.
"About a third of them are in places where there are no jobs. There are the holiday baches in Waiheke, Great Barrier, Rodney and Franklin, and the Waitakere Ranges."
He said the exception was the Waitemata Local Board area where the vacancy rate was 11 per cent. This could partly be explained by the high number of apartments in the CBD, which were often lived in part-time by long-distance commuters.
"We also know apartments are more popular among investors," he said. "And it's possible that part of that is genuinely a bigger share of apartments bought as investments that aren't being rented out to tenants."
Auckland Councillor Chris Darby said he knew of several "lock-and-leave" apartments in the city, also known as "ghost houses".
"It is still common even though you're not seeing capital gains anywhere near the extent was have seen a few years ago," he said.
Darby said there were also a relatively high number of empty mansions near his home in Stanley Point on the North Shore. One of them, on Stanley Point Road, was bought by foreign owners in 2011 in a foreclosure sale and had never been lived in.
"You could probably put about four families in it," he said. "The owners said two or three years ago they were just renovating before moving in but that has not happened."
Since it was bought, the house has risen in value from $3m to $4.8m.
Auckland councillor Chris Darby says he knows of several 'lock-and-leave' apartments in Auckland which investors are deliberately leaving empty. Photo / Greg Bowker
Auckland Council considered the issue of empty houses as part of the Mayoral Housing Taskforce on Housing but decided not to tackle it, partly because of the lack of hard data on how many "ghost houses" there were in the city. Darby said further investigation of the issue would need central government assistance.
Nick Goodall, head of research at CoreLogic NZ, said some foreign jurisdictions were able to measure long-term vacant properties by looking at data on power and water usage.
"You know if there's no power being consumed you can say there's no one living there. We've never been able to get a comprehensive dataset around that."
Goodall said stricter rules for property investors and foreign buyers in the last few years should have reduced the number of vacant homes.
"The attraction of having a property and not getting rent on it is that you are banking on the capital gain. Our expectation would be that would have reduced in the last few years because there has been tightening of speculator activity and how long people hold their properties for."
The worst vacancy rate in the country was the West Coast (18 per cent), where job prospects have become worse in the last five years.
There are no penalties for leaving a house vacant in New Zealand. In the United Kingdom, homes which are left vacant for more than two years can incur a rates increase of up to 100 per cent.
EMPTY HOUSES • Auckland: 7.3% of houses vacant (39,393 homes) • Lowest vacancy rate: Nelson (5.8%) • Highest vacancy rate: West Coast (18.69%)
