Australia’s unoccupied dwelling rate sits at 10.1%, but some regional markets record figures six times higher, with properties left empty most of the year due to their use as holiday homes, according to Ray White head of research Vanessa Rader (pictured).
Queensland’s Moreton Island topped the list with 66% of dwellings unoccupied.
“These astronomical figures reveal the concentrated geography of Australia’s holiday home phenomenon and challenge fundamental assumptions about property investment returns,” Rader told The Courier Mail.
Rader said unoccupied housing data highlights how regional markets operate under different economic principles than city-based investments.
Despite its high vacancy, Moreton Island continues to attract strong capital growth.
“Moreton Island claims Australia’s highest unoccupied dwelling rate at 66%, yet defies assumptions that extreme vacancy indicates market weakness,” Rader said.
“Properties command a median price of $1.25 million, with annual growth of 11.5% and remarkable 10-year appreciation of 140.9%.”
She said the island’s isolation both adds prestige and drives up costs.
“Vehicle access requires four-wheel drive capability and ferry transport, yet this isolation creates premium positioning that conventional metrics struggle to capture,” Rader said.
“However, building materials and tradespeople require ferry transport, increasing maintenance costs significantly while insurance premiums often run 30-40% above mainland alternatives.”
Two Tasmanian regions – Central Highlands and Glamorgan-Spring Bay – also ranked among the top 10.
“Central Highlands records 58 per cent unoccupancy with exceptional 157% 10-year growth at $321,250 median, while Glamorgan-Spring Bay shows 132.4% decade appreciation despite a recent 6.5% annual decline,” Rader said.
Victoria dominated the list, claiming four of the ten highest unoccupied areas – Lorne-Anglesea, Point Nepean, Phillip Island, and Otway.
“Lorne-Anglesea commands the highest median price at $1.57 million, yet records modest 3.8% annual growth,” Rader said. “Point Nepean follows similarly at $1.31 million with identical 3.8% growth.”
Rader said this trend shows premium markets may be reaching natural growth limits as affordability tightens – a challenge mirrored nationally as Bullock warns housing supply remains well behind demand.
Rader said high-vacancy regions face rising environmental and regulatory risks.
“Highly unoccupied locations face environmental risks that many traditional residential investments confront,” she said. “Coastal exposure accelerates maintenance cycles through salt air corrosion, with insurance premiums often 20-30% above regional averages.”
She added that climate pressures and new state levies could reshape returns.
“Victoria’s 7.5% levy on short-stay platform revenue affects four locations in the analysis, while various councils implement rates surcharges for Airbnb properties,” Rader said.
“These measures respond to housing affordability pressures but reduce rental income potential for holiday home investors.”
For brokers, the findings highlight how capital gains in lifestyle regions are being driven by scarcity rather than rental yield – a trend reinforced by RBA’s warning that housing shortages are structural, not cyclical.
“Moreton Island’s exceptional growth alongside extreme vacancy demonstrates how exclusivity can drive returns independent of rental income potential,” Rader said.
“Conversely, established premium markets like Lorne-Anglesea show how tourism success doesn’t automatically translate to sustained appreciation.”
Rader said investors and brokers should identify three key market types:
“Success requires understanding unique cost structures, risks, and market dynamics that distinguish these locations from conventional residential investment,” she told The Courier Mail.
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