Housing shortfall, costs and affordability

[tomh009]

Why London is Filled with Empty Homes
https://www.alux.com/london-empty-homes/

A bit of a long read but worth it. I’m sure it’s relevant to Canada as well.

I have some issues with this, and it's mostly to do with their use of data (as Samuel Clemens said, there are lies, damned lies and statistics). First, they are highlighting 200,000 empty homes in England. The latest number is actually 237,340 long-term empty homes (same government data source) in 2022 -- but this is well down from 318,642 in 2004, when the data series starts. And the total number of homes in England is 22,693,802, which they don't mention. Rather than showing that lots of homes are sitting empty, this actually shows that the long-term vacancy rate is barely over 1% -- and well down in the last 20 years (the UK has severe zoning constraint issues as well). Total vacancies are at about 3%.

Then they go on to explain that rich people are buying homes and letting them sit vacant because it's an excellent investment, up 68% from 2008 to 2018. Well, I already explained that fewer homes are vacant now -- but that 68% increase translates to only 5.3% year -- the London stock index went up 4.3% during the same time. Stocks frequently also earn dividends, while empty homes will attract property/council taxes and maintenance costs.

After that, the article makes another U-turn, and explains how the property owners can actually earn massive rents: "Just to rent a 2 bedroom apartment here will cost you around 5500 pounds per week, that’s 30,000 dollars per month." Check rentcafe.com for Central London, and you will see plenty of very nice 2BR apartments for 2000-3000 UKP per month. This is just more hyperbole.

Finally, they talk about why billionaires choose to reside in another country: maybe true, but the number of billionaires is still very tiny so their homes being empty most of the year will not even register in the statistics when there are nearly 23M total homes in England.

And, all that said, over in this country, while Statistics Canada data says that while most recently-constructed condos are not owner-occupied, it also indicates that few of those condos are sitting vacant.

And, yeah, I should move this discussion into a more appropriate thread ...