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Vacant housing: Data, policies and developments

This paper explores the reasons why housing can be vacant and presents data about the amount of vacant housing in NSW. It summarises the range of policy responses to long-term vacant housing adopted around the world and provides an overview of recent NSW parliamentary and government developments.

Daniel Montoya, BEnvSc (Hons), PhD
Christine Lamerton, BA (Lib Sci), AALIA
Parliamentary Research Service
Research Paper 3, 2025

Explore vacant housing data and developments in detail:

NSW electorates interactive table that allows all 93 NSW electorates to be compared
NSW regions interactive table that allows 12 NSW regions to be compared
Read the key points or watch the online briefing

Read the paper

Vacant housing: Data, policies and developments PDF

Research Paper 3, 2025

Key points

Vacant housing can be divided into 2 broad groups according to the length of vacancy: short-term vacancies (less than 6 months) and long-term vacancies (6 or more months).
The total amount of short-rentals, holiday homes, second homes and inactive, long-term vacant housing in NSW was estimated to be 298,510 in 2021. Long-term vacancy is not well understood, in part because of the lack of data. Drawing upon 3 sources of vacancy data in NSW, the total number of inactive, long-term vacant dwellings could be somewhere between 15,000 (0.5% of total dwellings) and 43,185 (1.4%).
Researchers in Australia and other jurisdictions have called for improved data on vacant housing to inform better policymaking.
The question of whether housing vacancy could be considered problematic depends in part on the reasons for the vacancy. Short-term, frictional vacancy, where a dwelling is available for sale or rent, is essential for a well-functioning housing market. Some types of involuntary long-term vacant housing, such as abandoned dwellings, can lead to negative outcomes including increased crime rates. Voluntary long-term vacancies, where dwellings are held vacant for reasons such as speculation for capital growth, are considered problematic in many jurisdictions where housing affordability is an issue.
Both ‘carrot’ and ‘stick’ policy responses are being used around the world to deal with long-term vacant housing. These policy responses range from tax incentives and dedicated government staff who work with owners to bring vacant housing back into use, to taxation and compulsory requisition or purchase.
Vacant property taxes have been established in 27 jurisdictions. Arguments in favour of these taxes include that they are a proportionate response to the lack of adequate housing, and that case studies have shown that they can play an effective role in bringing vacant units back onto the market. Arguments against include that the effect of the tax will only be transitory, that the economic costs for owners may be higher than the economic benefits, and that effective enforcement is difficult and costly.
Vacant housing has been debated on several occasions by the 58th NSW Parliament. Several members across political parties have called for measures to be introduced to reduce the amount of long-term vacant housing. A series of motions calling for the government to conduct a residential dwelling use and vacancy audit have also been debated.
In February 2024, the NSW Government released a discussion paper on short and long-term rental accommodation. The paper noted that vacant housing could provide a housing supply solution for the near future and canvassed potential financial incentives for owners to shift short-term rental accommodation, vacant housing and holiday homes to long-term uses. In December 2024, planning reforms were made to allow for the use of vacant dwellings for temporary housing purposes.

Published: 24 July 2025

Briefing session

Watch the online briefing session on vacant housing data, policies and developments.