The cost of squatting: unwanted guests’ impact on Wonthaggi homes

By Trent Westaway

SQUATTING has become an unfortunate reality for many property owners in Wonthaggi, affecting the local real estate market in ways that are difficult to ignore. 

With squatters occupying vacant homes, the ripple effect is being felt by sellers, buyers, and landlords alike. 

Mick Chambers, a fourth-generation local, has seen Wonthaggi transform from a quiet town to the thriving coastal area it is today. 

With over 15 years in real estate, he’s gained a deep understanding of the market and the obstacles that arise when properties are overtaken by squatters. One such example is a property on Graham Street, which Mick recently dealt with. 

“It’s had squatters in there for quite some time. The owner has tried to sell it a couple of times but hasn’t been able to. When we took it on, I asked the police to do something about it. They went down and asked the squatters to move on, but they came back quickly.”

The impact on the market is undeniable. Squatting not only devalues the affected property but also hurts neighbouring homes. 

“It makes it hard to sell the property. We can’t get access to  walk through the property, it’s hard to have inspections, and it devalues the property,” said Mick. 

Squatters often leave properties in poor condition, leading to costly repairs and extended time on the market. 

“Generally, many of these houses aren’t looked after too well, and there’s damage to them. Then it impacts the surrounding houses. If the price of that one goes down, then it makes the next-door neighbour’s house go down in value. It trickles down to all the other properties.” 

Squatters’ rights, which make it difficult to remove them, further complicate the issue. 

“Squatters have rights that make it hard for us to ask them to leave. You can’t just send the police to kick them out. You’ve got to go through VCAT to evict them, and that’s a huge process. That can take a long time and is very costly,” Mick explained.

For homeowners looking to sell, squatting presents additional challenges. Properties with squatters, or those in close proximity to squatted homes, often struggle to attract buyers. 

“It’s just the reputation change. The narrative used to be ‘I don’t want to buy near a housing commission home,’ but now the focus has shifted a bit to houses with squatters.”

As Mick points out, the broader economic situation also plays a role in escalating squatting incidents. Rising land taxes, vacant residential taxes, and higher interest rates have forced many property owners to sell their homes, which only contributes to the strain on the rental market. 

“The biggest holes in the rental market come from the fact that the landlords are paying so much for their properties, they don’t want to keep them anymore. One in three of our properties for sale now would be landlords’ properties. They’re selling them because they can’t afford to keep them.”

The shortage of rental properties adds to the strain. With demand at an all-time high, legitimate renters find it increasingly difficult to secure homes, while squatters occupy properties that are no longer in rentable condition. 

“The properties that squatters are in are properties that are not usually at a standard to rent. But it does stop developers, or owners, from knocking down their properties,” Mick explained.

The financial implications for property owners dealing with squatters are significant. Not only do they face the cost of repairs, but legal fees associated with evicting squatters can add up quite significantly. Prolonged time on the housing market can also result in further financial losses. 

“You’ve got to pay for repairs, you’ve got VCAT to pay for, and you’ve also got the loss of value to the property,” Mick notes. 

“You also have to consider the time on the market, as these houses are not likely to sell quick unless they’re extremely cheap.”

While these challenges are formidable, there are ways to prevent squatting from occurring in the first place. 

“You’ve really got to board them up properly. Act quick because once squatters are in, it’s a lengthy process to get them out,” Mick advises.

Despite the setbacks caused by squatting, Mick remains optimistic about the future of Wonthaggi’s property market. 

“I don’t think it has hurt our market a huge amount. Our market is still going okay and is still quite strong. You’re always going to have those properties that are difficult to sell or those with squatters, but the overall market remains relatively healthy.”.

However, the challenges of squatting, coupled with the broader financial pressures on property owners, suggest that the issue may persist for some time. 

As Mick explains, “The new land tax is just unfair. A person that’s done well for themselves and worked hard all their life and bought themselves an investment property, they’re the ones that are getting hit – they just can’t afford to keep that second home anymore.”

For now, it’s clear that the effects of squatting are reverberating across Wonthaggi’s property market. The combination of legal complexities, property taxes, and the rental crisis means that squatting could remain an ongoing concern for property owners and real estate professionals in the area.