Vacant buildings do not account for high housing prices
Synthesis:
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The PiS (Law and Justice) government is working on a tax on unoccupied flats/apartments (vacancies). It does so according to the thesis popular among some publicists that an important factor responsible for high housing prices is the phenomenon of buying them "speculatively" or "for investment" and leaving them empty so that their value increases along with property prices. However, this thesis is nonsensical, because it assumes that the owner voluntarily gives up rental income of a few percent per year, which does not interfere with the benefits derived from the increase in property prices.
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The data show the exact opposite relationship. The higher the housing prices in a county, the lower the proportion of vacant apartments in condominiums and cooperatives in that county. Therefore, where prices are high (Sopot, Warsaw, Tatrarzanski poviat, Gdańsk...), vacancy rates are low, and where vacancy rates are high (Radomszczański, Augustów, Otwock poviats...), prices are low or moderate.
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What determines apartment prices (except for e.g. health resorts) are average salaries. In the provincial cities, the average salary explains as much as 88% of the differences in apartment prices between them.
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In the case of housing cooperatives, the vacancy rate is 1.2%, and in the case of housing cooperatives - 0.2%. In the public housing stock, the vacancy rate is much higher - as much as 13.8% of the stock is owned by the State Treasury, 8.5% by workplaces, 7.4% by municipalities and 1.4% by TBS [Social Housing Societies].
- As many as 58% of all vacant apartments remain in the state-owned resources - municipal, workplaces, the Treasury and TBS. The question arises whether a possible tax would not fall mainly on local authorities, whose communal apartments account for as much as half of all vacant apartments. At the same time, such an incentive makes no sense in their case, as numerous vacancies result from the fact that rents of council apartments do not cover the cost of their maintenance, so many of them fall into disrepair. Local authorities have very limited possibilities of raising rents or verifying the income of tenants.
Contact to the author:
Rafał Trzeciakowski, FOR economist
rafal.trzeciakowski@for.org.pl
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