Welcome to the second instalment of our Empty Suburbs series, where we will be taking a look at the suburbs and localities with the highest vacancy rates as of the 2021 Census. For this instalment, we will be exploring Victoria.
From our last episode where we covered New South Wales, we found that the highest vacancy rate suburbs are along the Central Coast and the Inner City. Rather than just commenting on the phenomenon of high vacancies, we will also be highlighting the comparison between Victoria and New South Wales and the impacts of COVID-19 on Victoria’s dwellings. Do we see similar trends in Victoria? Are there any notable differences?
Before we jump into the list, let’s take a look at our definitions again in case you missed the last episode. The Australian Bureau of Statistics (ABS) defines an unoccupied dwelling as “structures built specifically for living purposes which are habitable, but unoccupied on Census night”. For the purposes of producing an interesting and insightful list, we will only be including Metropolitan areas of Australia with greater than 200 total dwellings. Specifically, we will be using the ABS’s Suburbs and Localities geography.
Taking the same approach as the first time gives the following list:
Hold on a second...
…all of these suburbs/localities are along the Mornington Peninsula! This is not surprising for those of you who are familiar with Victoria, but what happens when we extend the list?
From the top 30, we see similar trends to New South Wales, with a considerable proportion of suburbs and localities either in the inner city, or coastal areas.
The Trends and the Differences
Coastal Retreats and Pockets of Peace Part Two?
The Mornington Peninsula plays a similar role to New South Wales’ Central Coast, featuring holiday homes and idyllic views. As areas near Point Nepean and the townships along the Western Port Bay have an hour and half’s commute to central Melbourne, Melburnians with families and work commitments may prefer to live closer to the employment centres of Melbourne.
Like the Central Coast, the median age along the Mornington Peninsula is higher than the median for Victoria. There is also a lower proportion of the population in the labour force, indicating that these areas have a higher share of retirees. We also see a higher share of residents of Australian, English, Irish and Scottish ancestry than Victoria, and a higher share of Australian-born residents.
However, note that as Census data is collected in August, the vacancy rates presented here may be higher than they would be in January, when people are on a break. Additionally, the 2021 Census is not the best representation of a ‘business-as-usual’ scenario due to the COVID-19 pandemic, as people with homes along the peninsula may have preferred to be at their holiday residence under lockdown. Although this also affected NSW, Victoria’s 5km travel limit arguably provided a stronger reason for people to move away – we can see this in the numbers, with Portsea’s vacancy rate in 2016 being 87% (12% higher than the 2021 figure), with similar trends for other suburbs on the list.
Why are the vacancy rates in the Mornington Peninsula higher?
Despite the impact of the pandemic in reducing vacancies, we find that Victoria records higher maximum vacancy rates across the board, with the highest on our list being Portsea coming in at a whopping 75% vacancy rate compared to our top suburb for New South Wales, Pearl Beach, which has a 59% vacancy rate.
This can be explained by looking at the role these areas play within their states. When compared to the New South Wales median, the Central Coast is relatively more affordable, with a median weekly mortgage repayment of $1,738 which is lower than the New South Wales median of $1,986. There is a lack of affordable housing in Sydney’s northern suburbs, which means that many may decide that living on the Central Coast is a smarter option, particularly as the employment centres of Erina, Gosford and West Gosford are only a 20 minute drive away from coastal areas.
In contrast, the Mornington Peninsula is relatively more expensive than Victoria, with median repayments of $1,989 compared to $1,859 in Victoria. This may be due to the type of housing the area provides – with over 80% of occupied private dwellings being 3-4 bedroom houses. This lack of housing diversity may make it more difficult for smaller families or couples to find a suitable dwelling, and when combined with the cost and long commute up to the CBD, Melburnians may decide that the value proposition is less enticing along the Mornington Peninsula.
Overall, these factors cause fewer people to permanently settle on the Mornington Peninsula, and more people in Sydney to permanently settle down on the Central Coast.
Hustlin' and Bustlin'
Moving further down the list, we see the Inner City suburbs of Melbourne, Southbank and Docklands.
With inner Melbourne’s large rental market, these vacancies can be explained by the higher turnover of people based on a larger share of overseas business professionals, international travellers and students where people may only stay for a few months. We see this reflected in the numbers, with a median age of 29 (vs Victoria median of 38) and only 17.1% of residents being born in Australia (vs 48.9% for Victoria) in the suburb of Melbourne.
This demographic makeup is less extreme in Docklands and Southbank, which is home to more working professions (71% in the labour force in Docklands and 77.7% in Southbank compared to Victoria’s 62.4%).
As for Carlton, East Melbourne and West Melbourne, these suburbs act as extensions to the Inner City rental market, with easy access to the CBD, but not quite in the midst of the hustle and bustle.
In particular, Carlton is home to many students with a median age of 27, as the University of Melbourne plays a significant role in shaping the area. Note that the vacancies particularly in Melbourne and Carlton are exacerbated by the loss of international students in 2021.
What about Warburton?
Warburton is a bit of an outlier, but has similar tourist attractiveness like the Mornington Peninsula. Featuring buildings dating back to the 1900s and surrounded by forests and national parks, it has also become a desirable location for a holiday home, similar to the Blue Mountains.
Closing thoughts
On the surface, metropolitan Melbourne and Sydney look almost identical in their pattern of high vacancy dwellings, however a closer look reveals the nuances between the two states and how these differences manifest in the data.
Overall, the most surprising finding for our team was the difference in the maximum range of vacancy rates, as Victoria’s were significantly higher than that of New South Wales’. Did this surprise you as well?
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