tag:theconversation.com,2011:/ca-fr/topics/vacancy-rate-40322/articlesvacancy rate – La Conversation2020-08-24T20:04:18Ztag:theconversation.com,2011:article/1440562020-08-24T20:04:18Z2020-08-24T20:04:18Z‘Meanwhile’ building use: another way to manage properties left vacant by the COVID-19 crisis<figure><img src="https://images.theconversation.com/files/354046/original/file-20200821-22-a58kkv.jpg?ixlib=rb-1.1.0&rect=0%2C39%2C3264%2C2198&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Cathy Smith (2014)</span>, <span class="license">Author provided</span></span></figcaption></figure><p>The COVID-19 pandemic has temporarily shut down cities across the globe, resulting in <a href="https://www.realestate.com.au/insights/property-market-update-how-cbds-will-survive-post-covid-19/">abandoned buildings</a> and deserted streets. How might we better use our own <a href="https://www.smh.com.au/business/companies/office-vacancy-rates-on-the-rise-as-pandemic-takes-its-toll-20200812-p55kzr.html">vacant buildings</a> during the crisis and beyond? We can learn from the benefits and challenges of the UK’s “meanwhile” building use sector. </p>
<p>Sometimes referred to as <a href="https://www.london.gov.uk/sites/default/files/draft_london_plan_-_consolidated_changes_version_-_clean_july_2019.pdf">meanwhile housing</a> or <a href="https://www.london.gov.uk/sites/default/files/plpg.pdf">property guardianship</a> in its residential forms, it’s a recognised property tenure solution for vacant buildings in the UK and Europe. It enables properties that are lying dormant, or awaiting redevelopment, to be used temporarily as workspaces, shops or housing. </p>
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Read more:
<a href="https://theconversation.com/unused-buildings-will-make-good-housing-in-the-world-of-covid-19-142897">Unused buildings will make good housing in the world of COVID-19</a>
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<p>Meanwhile use serves a dual purpose by activating an otherwise unused property while providing the owner with building security for a set period. It involves relatively cheap licences or flexible leases managed by a third-party, and often for-profit, agent. </p>
<p>Creatives and business startups who cannot afford expensive city rents or commercial leases are attracted to the unusual and large industrial or institutional buildings often used for meanwhile schemes. London property guardianship featured in Phoebe Waller-Bridge’s 2016 television comedy <a href="https://www.imdb.com/title/tt5295524/">Crashing</a>. The series chronicles the misadventures of a group of property guardians living in a former hospital.</p>
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<figcaption><span class="caption">Crashing is a comedy about a group of property guardians living in a disused London hospital.</span></figcaption>
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<p>It would be tempting to think of meanwhile use as a quick-fix for Australia’s own twin problems of temporarily vacant buildings and unaffordable rents in major cities. Yet, as I discovered when visiting London meanwhile schemes in 2018, their success relies upon careful management. </p>
<p>The intersecting legal, social and design issues can be complex. That’s particularly the case for property guardianship — perhaps <a href="https://www.london.gov.uk/sites/default/files/plpg.pdf">the most controversial form of meanwhile use</a>. </p>
<p>It is important to understand the different forms of meanwhile use that make it compelling and, in some cases, problematic.</p>
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Read more:
<a href="https://theconversation.com/as-demand-for-crisis-housing-soars-surely-we-can-tap-into-covid-19-vacancies-143815">As demand for crisis housing soars, surely we can tap into COVID-19 vacancies</a>
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<h2>Meanwhile use has limitations</h2>
<p>The biggest criticism of meanwhile use is that it’s an <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/abs/10.1111/tran.12162">insecure or unreliable form of accommodation</a>. Schemes using short-term occupation licences rather than conventional tenancies may be ideal for occupants attracted by their relatively cheap costs and flexibility. However, occupants will not be legally protected to the same extent as they would be under tenancy law. </p>
<p>For example, UK property guardians may find themselves “homeless” 28 days after an eviction notice. Unlike rental tenants, they <a href="https://www.london.gov.uk/what-we-do/publication-sian-berry-response-draft-london-plan/publication-sian-berry-protections-property-guardians-during-covid-19-crisis">might not be protected from eviction</a> during the COVID-19 crisis, even if they live in council-owned buildings. </p>
<p>If owned by local authorities, buildings used for property guardianships <a href="https://www.journalism.co.uk/press-releases/protection-for-property-guardians-during-the-covid-19-crisis/s66/a753585/">may also be requisitioned at short notice</a> to be used for pandemic-related emergency care.</p>
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Read more:
<a href="https://theconversation.com/property-guardians-live-in-legal-limbo-despite-new-law-to-protect-tenants-from-exploitation-114943">Property guardians live in legal limbo – despite new law to protect tenants from exploitation</a>
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<h2>Tenure terms only suits some people</h2>
<p>Due to the uncertainty of its tenure, meanwhile use schemes target different participants to standard renters or commercial tenants. This makes them suitable for some people only. </p>
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<a href="https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/351540/original/file-20200806-18-13dyr7v.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A former telephone exchange in Waltham Forest, London, is now Switchboard Studios, a ‘meanwhile’ workspace for local businesses, startups and creatives.</span>
<span class="attribution"><span class="source">Cathy Smith (2018)</span>, <span class="license">Author provided</span></span>
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<p><a href="https://research.unsw.edu.au/people/dr-cathy-smith">My research</a> suggests the low costs and flexible arrangements of meanwhile workspaces are attractive to return-to-work mothers or caregivers starting a business. They also appreciate the sense of camaraderie and community fostered by schemes such as the former non-profit <a href="https://renewnewcastle.org/about/">Renew Newcastle</a> and <a href="https://www.renewaustralia.org/">Renew Australia</a>. </p>
<p>A similar sentiment was expressed by the young occupants of a <a href="https://dotdotdotproperty.com/info-cosmopolitan-project/">women-only property guardianship I visited in inner London</a>. They included an artist and a health worker on relatively low incomes. </p>
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Read more:
<a href="https://theconversation.com/from-placeholder-to-pathfinder-innovative-temporary-site-uses-help-us-reimagine-city-spaces-63926">From placeholder to pathfinder: innovative temporary site uses help us reimagine city spaces</a>
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<p>However, the uncertain duration of property guardianship typically <a href="http://www.camdennewjournal.co.uk/article/im-being-evicted-for-having-a-baby-claims-property-guardian-tenant">excludes people with children</a>. Some agencies stipulate that property guardians must be employed full-time, over 21 years of age and nominate an alternative housing address in case they need to relocate quickly. </p>
<p>Thus the short-term arrangements that make meanwhile workspaces good for working mothers also make it difficult for them to become property guardians.</p>
<h2>Building conditions and management vary</h2>
<p>Another important constraint on meanwhile use may be the condition of the property itself. Unused shopfronts and office buildings can be ideal for young creatives like <a href="https://www.anthrosite.com.au/Project%20-%20item/suite-76-office/">architects trialling design prototypes</a>. They have the knowledge and skill sets to temporarily transform a space. </p>
<p>Problems can arise when a property unfit for human habitation is used for meanwhile schemes without the owner or agent making the <a href="https://www.london.gov.uk/sites/default/files/plpg.pdf">necessary investment in building upgrades</a>.</p>
<p>Some mismanaged property guardianships have led to costly legal disputes. In <a href="https://nltimes.nl/2016/03/25/city-property-firm-negligent-shower-electrocution-janneke-van-gaal">one Dutch case</a>, the council building owner, a property guardianship agency and their maintenance worker were held to be negligent for the death by electrocution of a young property guardian. This worst-case example reminds us that, even though meanwhile use suits some people and professionally managed properties, it will not solve the root causes of our housing crises and vacant city streets.</p><img src="https://counter.theconversation.com/content/144056/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Cathy Smith's research on meanwhile use is funded by a Turnbull Foundation Women in Built Environment Scholarship (UNSW), a Richard Rogers Fellowship (Harvard GSD) and an Australian Government Research Training Program Scholarship.</span></em></p>When thinking about better uses for temporarily vacant buildings caused by the pandemic, Australia can learn much from the UK.Cathy Smith, Senior Lecturer, Interior Architecture; Inaugural Women in Built Environment Turnbull Foundation Scholar, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1438152020-08-11T20:11:31Z2020-08-11T20:11:31ZAs demand for crisis housing soars, surely we can tap into COVID-19 vacancies<p>There is a <a href="http://www.nwhn.net.au/admin/file/content2/c7/A%20crisis%20in%20crisis%20doc%20final%20040219_1550142202053.pdf">crisis within crisis</a> accommodation. Homelessness providers struggle to meet women’s <a href="https://www.aihw.gov.au/reports/homelessness-services/shs-annual-report-18-19/contents/unmet-demand-for-specialist-homelessness-services">requests for accommodation</a> under usual circumstances. During COVID-19 lockdowns the dramatic <a href="https://theconversation.com/we-are-in-a-bubble-that-is-set-to-burst-why-urgent-support-must-be-given-to-domestic-violence-workers-141600">increase in domestic abuse</a> has put an already stretched system under greater pressure. </p>
<p>Crisis accommodation providers were interviewed for an ongoing <a href="https://www.eventbrite.com.au/e/expanding-crisis-accommodation-for-victim-survivors-of-family-violence-tickets-114496052776?utm-medium=discovery&utm-campaign=social&utm-content=attendeeshare&aff=escb&utm-source=cp&utm-term=listing&fbclid=IwAR3SGR1QyEghFjjBqbJIwfj8KOY25fHBEQF-QM3sE6uGCbNwtTn0LHuoiFo">research project</a>. One of them reported a six-fold increase in demand for their homelessness services from a wider range of people, “people who would not normally access the system”. Another said: “Adding the lens of COVID-19 has exacerbated this as a public health issue.”</p>
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Read more:
<a href="https://theconversation.com/what-governments-can-do-about-the-increase-in-family-violence-due-to-coronavirus-135674">What governments can do about the increase in family violence due to coronavirus</a>
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<p>Many crisis accommodation providers have turned to low-end motels, but these have proven to be <a href="https://www.abc.net.au/news/2019-02-15/family-violence-victims-sent-to-unsafe-motels-in-housing-crisis/10793992">expensive, unhygienic, unsafe and harmful for women’s health</a>. Women stuck in this substandard crisis accommodation are often unable to find long-term, stable and affordable housing due to <a href="https://www.missionaustralia.com.au/news-blog/news-media/domestic-and-family-violence-and-affordable-home-shortage-pushes-thousands-into-homelessness">lack of supply</a>. This compromises their ability to recover from trauma and increases their risk of returning to perpetrators. </p>
<p>We can do better. </p>
<h2>Opportunities in a crisis</h2>
<p>The COVID-19 pandemic has led to distinct shifts in the supply of short-term accommodation in our cities. The number of <a href="https://www.domain.com.au/research/domain-rental-vacancy-rate-april-2020-easing-conditions-952173/#:%7E:text=Melbourne's%20vacancy%20rate%20also%20increased,2.9%20per%20cent%20in%20April.">vacant properties has increased</a>, particularly in Australia’s two largest housing markets, <a href="https://www.abc.net.au/news/2020-07-20/coronavirus-blamed-for-rental-vacancy-rise-sydney-inner-suburbs/12471080">Sydney</a> and <a href="https://propertyupdate.com.au/vacancy-rates-continue-to-rise-in-melbourne-and-sydney/#:%7E:text=However%2C%20the%20largest%20rental%20markets,record%20a%203.1%25%20vacancy%20rate.">Melbourne</a>, while <a href="https://www.realestate.com.au/news/coronavirus-massive-melbourne-rent-price-drops-as-stock-piles-up/">rents have fallen</a>. This has been attributed to drops in demand from <a href="https://www.theage.com.au/national/victoria/inner-city-rental-vacancy-rate-nearly-triples-amid-covid-19-student-exodus-20200523-p54vri.html">international students</a> and from travellers in the short-term <a href="https://www.businessinsider.com.au/coronavirus-airbnb-rents-impact-rental-market-australia-2020-3">Airbnb rental</a> market. </p>
<p>These demand and supply trends, taken together, offer an opportunity. The two short-term housing tenures might provide an alternative to poor quality and unsafe motels and better meet the housing, social and emotional needs of women seeking crisis accommodation. </p>
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Read more:
<a href="https://theconversation.com/400-000-women-over-45-are-at-risk-of-homelessness-in-australia-142906">400,000 women over 45 are at risk of homelessness in Australia</a>
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<p>The use of vacant land and buildings for temporary housing in Australia is increasingly being tested. There are projects using <a href="https://www.launchhousing.org.au/housingsupport/harris-transportable-housing-project">government land</a> and <a href="https://www.abc.net.au/news/2017-04-03/opening-an-empty-sydney-building-to-the-homeless/8405196">commercial</a> or <a href="https://housingallaustralians.org.au/product/lake-house-victoria/">institutional</a> buildings for pop-up shelters for temporary housing. It follows that crisis accommodation and community housing services might broker a marriage of convenience, taking advantage of increasing vacancies in the short-term rental market. </p>
<h2>Potential and pitfalls</h2>
<p>Some of the interviews with crisis accommodation and community housing providers highlighted the potential to use short-term rental housing for their service users. One interviewee observed: </p>
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<p>[…] the benefit is that it is a home. It has a kitchen, facilities and people have independence, which can help facilitate them finding something more permanent.</p>
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<p>In the face of COVID-19, the relationship between commercial accommodation services and community housing providers has already began to shift. </p>
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<p>All lot of these [commercial] providers have never been open to us as homeless services […] Some of the hotels prior to COVID-19 would never have taken our money […] now we are their main source of survival". </p>
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<p>Anecdotally, Airbnb is already providing an informal <a href="https://thenewdaily.com.au/finance/property/2020/05/22/airbnb-housing-void-rental/">stopgap</a> for people in need of emergency accommodation. Some community housing providers reported Airbnb property owners contacting them about leasing their properties short-term for crisis accommodation. </p>
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Read more:
<a href="https://theconversation.com/as-coronavirus-hits-holiday-lettings-a-shift-to-longer-rentals-could-help-many-of-us-134036">As coronavirus hits holiday lettings, a shift to longer rentals could help many of us</a>
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<p>Frustratingly, the moratorium on evictions was a complication. One provider noted: </p>
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<p>We can’t take it because we can’t serve a notice to vacate. Even if it’s a three-month lease you’ve still got to serve a notice to vacate. How do we get the tenants out for somebody new to come? I can’t guarantee that you’re going to get your property back. Especially when it’s crisis accommodation. </p>
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<p>Housing providers who are able to offer property management services have cited benefits for landlords such as a guaranteed income, no management fees, and maintenance services. </p>
<p>In turn, providers could offer better quality accommodation that can realistically support a longer stay – with wrap-around services depending on need – while they try to find more stable affordable housing in a scarce market.</p>
<p>One interviewee mused: </p>
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<p>Thinking about coercive control and thinking about not just housing women and children because they’re in immediate risk of death or serious harm, it’s because they need a break from being trapped. Can you imagine six weeks in a place where they get a chance, literally, from a trauma reform perspective?</p>
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<img alt="Drawing of woman holding up hand against abuse" src="https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=364&fit=crop&dpr=1 600w, https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=364&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=364&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=457&fit=crop&dpr=1 754w, https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=457&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/351876/original/file-20200810-14-nnfehr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=457&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Women need time in stable and secure housing to overcome the trauma their abusers have caused.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/woman-depression-abuse-beating-girl-child-725666314">Shutterstock</a></span>
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<p>While crisis accommodation could be expanded in this way, providers need to carefully consider some real and perceived risks. Above all, they must ensure women remained safe. One provider said:</p>
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<p>I’ve got a reservation about using [short-term rentals] for crisis accommodation. I think that’s hard. It’s possible but it’s hard because crisis accommodation is the most difficult to manage because people are at their most vulnerable.</p>
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<h2>A need to ‘reframe’ how we see housing</h2>
<p>In anticipation of increased demand, the Victorian government announced a <a href="http://dvvic.org.au/media-releases/domestic-violence-victoria-welcomes-todays-funding-announcement-for-family-violence-responses-during-covid-19/">A$40.2 million emergency funding package</a> for crisis accommodation. This will not be enough in the longer term. </p>
<p>There needs to be greater focus on the role housing can play, both in reducing COVID-19 transmission and as a broader social cure for the ills that are soon to follow. Subsidies to help crisis accommodation providers access new markets and a dramatic increase in social housing, as most housing services advocate, seem the most reasonable steps to take. </p>
<p>As one crisis accommodation frontline worker lamented, the current crisis system needed to be more agile to support COVID-19 adaptation and social entrepreneurship: </p>
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<p>It’s just about doing a reframe. What’s the reframe here for people to see that this [existing infrastructure] is all transferable?</p>
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<p>Gender-based housing inequality is hidden from view in Australia. That’s partly due to policy and practices that continue to partition family violence from broader discussions on housing affordability. </p>
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Read more:
<a href="https://theconversation.com/how-do-we-keep-family-violence-perpetrators-in-view-during-the-covid-19-lockdown-135942">How do we keep family violence perpetrators ‘in view’ during the COVID-19 lockdown?</a>
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<p>In the face of a projected need to house many more <a href="https://theconversation.com/400-000-women-over-45-are-at-risk-of-homelessness-in-australia-142906">older, marginalised women</a>, Australia needs to increase the available housing options. It could be through crisis accommodation or more ideally through increased long-term affordable and social housing. </p>
<p>These approaches not only make <a href="https://sustainable.unimelb.edu.au/__data/assets/pdf_file/0010/2740834/MSSI-IssuesPaper-10_Last-Resort-Housing_2017_0.pdf">economic sense</a>, but are critical to giving support agencies a much-needed lever to help make sure women are as “<a href="https://www.safeashouses.tenancywa.org.au/">safe as houses</a>”. </p>
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<p><em>If you or anyone you know is experiencing domestic or family violence, call 1800 RESPECT for help at any time. If you are in immediate danger, call 000.</em></p><img src="https://counter.theconversation.com/content/143815/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rebecca Bentley receives funding from Australian Research Council and the National Health and Medical Research Council. </span></em></p><p class="fine-print"><em><span>Erika Martino does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Accommodation providers are reporting huge increases in the numbers of people coming to them for help. They’d love to be able to use newly vacant rental housing, but it’s not a lasting solution.Erika Martino, Research Fellow In Healthy Housing, The University of MelbourneRebecca Bentley, Professor of Social Epidemiology, Centre for Health Equity, Melbourne School of Population and Global Health, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/800722017-07-04T20:11:10Z2017-07-04T20:11:10ZHow to tell when the housing market is slowing<p>Looking at data, there is no evidence to support the notion that house prices have <a href="http://www.abc.net.au/news/2017-06-02/have-we-finally-reached-peak-house-prices/8584470">peaked</a> or are on the cusp of a <a href="http://www.theaustralian.com.au/news/inquirer/heated-house-market-hits-a-ceiling-in-sydney-and-melbourne/news-story/08a7b3f7cdb2feecfbcb15dd82746358">downward trend</a>.</p>
<p>House prices in Australian capital cities <a href="https://www.corelogic.com.au/news/capital-city-dwelling-values-rise-0-8-over-june-quarter">rose slightly in June</a> after <a href="https://www.corelogic.com.au/news/multiple-indicators-point-to-softer-housing-market-conditions">falling in May</a>. But <a href="https://www.corelogic.com.au/research/monthly-indices.html">house price indexes</a> only show what’s happening in the market over a short time frame. Housing markets <a href="http://www.emeraldinsight.com/doi/pdfplus/10.1108/IJHMA-07-2016-0052">are volatile</a> and you could just be looking at a seasonal blip. </p>
<p>Looking at the market fundamentals, there are no signs of a housing market slowdown. These indicators include economic and population growth, the unemployment rate, new housing construction, and auction clearance rates. They give us an idea both of the overall demand in the market, as well as the ability to pay for housing. </p>
<p>As economic and population growth increase, for example, there is both more money to spend as well as more people in need of housing. The rate of new housing construction tells us what will happen to housing supply, and the percentage of housing successfully sold at auctions gives us an idea of where we are in the house price cycle.</p>
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<h2>Market fundamentals and key indicators</h2>
<p>As you can see in the chart below, economic growth has been relatively strong in both New South Wales and Victoria. Growth in Gross State Product for both states was 2.6% in 2014-15, and even stronger in 2015-16; this was higher than the GDP growth rate of Australia overall. </p>
<p>This suggests that the local economies of both Melbourne and Sydney are performing better than the overall Australian economy. And a strong economy feeds into more demand for housing. </p>
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<p>The next thing to look at is the unemployment rate. A low unemployment rate means that fewer people are under pressure to sell their houses or default on their mortgages. This means the chance of sharp price correction in the housing market is lower when the unemployment rate is low. </p>
<p>Again, the unemployment rate in both New South Wales and Victoria is relatively low, around 4.8% in NSW and 6% in Victoria, <a href="http://lmip.gov.au/default.aspx?LMIP/Downloads/ABSLabourForceRegion">compared with other states</a>. Unemployment is almost 7% in South Australia, for example. </p>
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<p>The auction clearance rate shows the percentage of housing that was successfully sold out of all the auctions that took place. The clearance rate roughly tracks housing prices - a high rate will normally be observed when house prices are high, and the reverse is also true. For example, the auction clearance rate was around 36-50% in Sydney in 2008. </p>
<p>Although the auction clearance rates in Melbourne and Sydney have dropped in recent months, they are still around 70%. This is comparable with the same period last year, giving no indication of a sudden movement in house prices one way or the other. </p>
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<p>The next indicator is the proportion of vacant properties in the housing supply, also known as the vacancy rate. This is used as a gauge of whether there is too much or too little supply of housing in the market. Normally, a housing market is cooling if there are many vacant properties. </p>
<p>The vacancy rate has remained stable in <a href="http://www.realcover.com.au/Web/Members/Vacancy_Rates/Web/Members/Property_data/Vacancy_Rates_Survey.aspx?hkey=7ab6613f-dc85-4b0f-9cac-566c9b3dc786">Sydney</a> and <a href="https://www.reiv.com.au/property-data/rental-data/vacancy-rates">Melbourne</a> recently, within a range of 1.7-2.2%. This suggests that there is little evidence of an oversupply of housing, and that housing demand is strong in both markets.</p>
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<p>Sydney and Melbourne show signs of strong population growth. This is true not just now, but over the past 6 years. As we can see in the following graph, both cities have recorded growth rates ranging between 13,000 and 43,000 people per quarter. </p>
<p>The strong population growth rate reflects that the fundamental demand for housing in both cities are high. Although more new dwellings have been completed in recent years, the levels are <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8752.0Dec%202016?OpenDocument">far below population growth</a>. This suggests that there is still more demand than supply in the housing markets in Sydney and Melbourne.</p>
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<p>The discrepancy between <a href="https://www.corelogic.com.au/news/multiple-indicators-point-to-softer-housing-market-conditions">May’s decline in capital city house prices</a>, and the other indicators that show no slow down in demand, illustrate the problem. These other indicators give you a better idea of overall demand for housing, which is what drives prices over the longer term.</p>
<p>Based on the prices alone, it is too early to tell whether the housing markets in Sydney and Melbourne are slowing or if they are on a downward trend. And the other indicators of the wider economy show us that housing demand is strong. It is only when this changes that you will know that house prices are slowing.</p>
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<p><em>This article included contributions from Mustapha Bangura, a PhD student researching housing affordability in Greater Western Sydney.</em></p><img src="https://counter.theconversation.com/content/80072/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chyi Lin Lee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The housing market is too volatile to look at prices alone. If you want to understand the housing market you need to look at the wider economy.Chyi Lin Lee, Associate Professor of Property, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.