Since I started writing for OneRoof earlier this year I’ve become a bit of a crusader for truth in property. By that, I mean that a significant number of my contributed articles have been about putting the record straight on property myths which are based on things that aren’t actually true, but which have gained a life all of their own.
Already, I’ve written about many such myths: that the property market is about to crash (it isn’t); that New Zealand once had the highest rate of home ownership in the world (it didn’t); that first home buyers have been closed out of the property market (they haven’t); that the foreign buyer ban worked (it made absolutely no difference); that the loan-to-value restrictions slowed the property market (again, not true); that only rich people invest in property (no); and that it’s cheaper to rent, than buy (again, no).
Most of these myths are hardy perennials in that media stories, advancing them, seem to pop up with regularity, fuelling howls of predictable outrage and a whole new round of calls for action from the usual quarters. But in most cases, a basic knowledge of the history of the market, an analysis of publicly available data, and the application of a bit of common sense will usually show that the reality is quite different to the mythology.
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Take the latest such example, the series of stories which have sprung up about "ghost houses" in Auckland (and other parts of the country). These stories are based on the latest Census data, which show that the number of unoccupied dwellings in Auckland rose from 33,360 in 2013 (7.1 percent of all dwellings) to 39,393 by 2018 (7.4 percent of all dwellings). This is described as a "worrying" increase – but as you can see from the overall numbers, the difference is negligible and the percentages are actually remarkably consistent.
And, as with the other "myths" mentioned earlier, this story isn’t new. It did the round three or four years ago – except, on that occasion, foreign buyers were being blamed for the number of empty homes. Clearly that wasn’t true, because the percentages haven’t changed despite the imposition of the foreign buyer ban, but the myth has evolved and now, just as there was then, there are calls from some quarters to force property owners to make these empty houses available to house the homeless. But what do the numbers really mean?
Firstly, let’s remember what the census actually is. It’s a snapshot of what’s happening on the day that the census is conducted. Some of that information has longevity. Things like population and the number of dwellings change slowly, so the census results are a good guide to these. But information around something like occupancy – who lives at an address at any particular point in time – changes constantly and the census is a much less reliable indicator of this.
We also know that the methodology for collecting this information is manual rather than digital – with media information from StatsNZ telling us that “census workers are given clear criteria on the various definitions of an 'unoccupied' house and need evidence no one lives there (the appearance of the property, talking to neighbours) before it’s officially classified".
In other words – despite the assurances – there’s a degree of subjectivity and room for human error in the data.
So why might a property be "empty" on census day? In fact, there could be any number of reasons. A property may have been sold and vacated but not yet occupied by the new owner (almost 40,000 homes were sold in Auckland in 2018); the owners could be on extended vacation or own a second home elsewhere; it could be a bach or holiday home; it could be a rental or investment property under renovation or repair or a rental that is just between tenants – and yes, there will even be some that are just "empty" for reasons known only to the owner.
The point is there are many reasons why a house may be unoccupied on the day of the census which don’t necessarily mean that it will be empty for a long period of time. But even if it is then frankly, that’s a matter for the owner and nobody else’s business. Fortunately we still live in a property-owning democracy and haven’t yet completely morphed into a communist state and the penchant of busy bodies and do-gooders to tell others how they should be using their property needs to be challenged and knocked on the head wherever and whenever we see it.
- Ashley Church is the former CEO of the Property Institute of New Zealand and is now a property commentator for OneRoof.co.nz. Email him at ashley@nzemail.com
