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Docklands ‘vacancy rate’ in doubt

02 Dec 2014

Docklands ‘vacancy rate’ in doubt Image

By Bethany Williams

Claims that Docklands’ residential vacancy rate is close to 30 per cent have been put in doubt after Docklands News’s investigation of Prosper Australia’s report.  

Prosper’s Speculative Vacancy 2014 report last month claimed the alarming statistic, which was based on average water usage figures in 2013.

After more than two weeks of conversations with City West Water (CWW), which provided most of the Docklands data for the report, Docklands News has been given conflicting data.

After earlier providing data which blew apart Prosper’s statistical claims (in 15 email exchanges), CWW  “corrected” its information just before this edition went to press, after being contacted by Prosper Australia.

The Prosper report relied on water usage data supplied by City West Water, Yarra Valley Water and South East Water and argued that properties using 50 litres of water or less per day over a 12-month period were most likely vacant.

The report looked at 2883 residential properties in Docklands and said 779, or 27 per cent used less than 50 litres of water per day on average in 2013 and were therefore “speculative vacancies”.

Instinctively, Docklands News knew there were more than 2883 properties in Docklands in 2013 and that there was no way close to 30 per cent of the homes in Docklands were unoccupied.  Places Victoria says there were 4895 apartments in Docklands in 2013.

Docklands News then asked both CWW and Prosper Australia to provide it with the raw data.

City West Water had told Prosper there were 2831 property connections in Docklands and 773 occupancies using less than 50 litres of water per day in 2013.

But, on November 19, a CWW spokesperson told Docklands News the 773 connections were not just restricted to residences.

Two days later, the spokesperson said the company’s data couldn’t distinguish whether the properties using no water were residential or non-residential.

In relation to the figure of 2831 properties in Docklands, on November 28 the spokesperson said: “the figures provided to Prosper were for property connections, which don’t necessarily mean occupancies, residences, businesses. The property connections may apply to an apartment building, a commercial facility, a fire service etc, and not an individual occupancy.”

But on December 1, after speaking with Prosper Australia, who had been contacted by Docklands News for comment, the spokesperson back-flipped and said he had been incorrect and that the data provided to Prosper related only to residential properties.

The vacancy rate claim caused major damage to Docklands, with many major news outlets picking up the “ghost tower” story without any scrutiny of the data used in the report.

Local real estate agents say the vacancy rate claim and resulting media coverage has had a significant negative impact on Docklands’ residential property market.

“It’s put a lot of doubt in potential buyers’ minds and created a lot of fear,” Barry Plant director Daniel Cole said.

According to the report’s author Catherine Cashmore, the figures in the report cover 72 per cent of Docklands’ current supply, as recorded by the City of Melbourne.

“From the standpoint of statistical analysis this is an adequate number to formulate a percentage of potential speculative vacancies,” Ms Cashmore said.

She said the variables that can bias the water data results are listed in detail within the report.

“However any results missing in the Docklands due to some apartment blocks not being individually water metered would most likely disguise additional vacancies – not pull the overall figure down,” she said.

Ms Cashmore also said the vacancy rate cited by real estate agents in the area relates only to available supply – not withheld supply and was therefore irrelevant to her research.

“The published vacancy rate in the Docklands is currently 4.4 per cent (SQM Research). However in 2013 it was as high as 10 per cent. It is hardly a reliable indicator.”

There are a range of variables that could affect water usage rates, which do not necessarily indicate vacant properties in Docklands.

Docklands’ transient nature, the use of apartments as city escapes and the high-proportion of single person households are just some of the factors that could result in low water usage.

Docklands has a particularly high percentage of sole-person households, with the 2011 census finding that 36.5 percent of Docklands residents live alone.

The report does concede, however, that there are variables which could affect the vacancy rate, including water leaks, properties for sale or rent, serviced apartments and sole-person households.

The actual residential vacancy rate in Docklands sits somewhere between two and four per cent, according to Docklands real estate experts.

Barry Plant director Daniel Cole said the report was “blatantly wrong”.

“We only have eight vacant properties in Docklands,” Mr Cole said.

City Residential managing director Glenn Donnelly said the vacancy rate in Docklands was nowhere near 30 per cent.

“There is definitely not a 30 per cent vacancy rate. I believe it would sit somewhere around four per cent,” he said.

Lucas Real Estate’s Glen Lucas also dismissed the report, saying: “The report is pretty inaccurate as far as our experience is concerned.”

“Our vacancy rate is at 2.1 per cent and that’s taking in 1200 rental properties on our books.

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