Think tank Prosper Australia’s review report has indicated that about one-fifth of the residential properties owned by investors in Melbourne remain vacant. The number of empty properties is 28 percent more than in 2014.

The eighth annual Speculative Vacancies paper took into account water usage as one of the vital factors for determining why properties are left vacant. From the analysis, it was learnt that around 82,724 properties, constituting 4.8 percent of Melbourne’s housing stock, are vacant and had used less than 50 litres of water per day.

Notably, the number of houses in Melbourne that are vacant have risen three years ago when the restrictions on foreign investment were made easier following the global financial crisis. “An estimated one in five new homes in Melbourne and Sydney are sold to offshore buyers,” the report stated.

“The majority are high-rise off-the-plan apartments marketed almost exclusively to foreign buyers. Foreign ownership of new real estate has been permitted in Australia without restriction.”

The report claimed that the increase in housing stock has thrown a positive impact on the market by increasing affordability. On the other hand, vacant houses owned by foreign investors have been inflating accommodation costs. The Australian Financial Review has reported that Victoria has approved 70,472 new residential properties in the past 12 months until October.

“There is an oversupply of housing that’s not being used,” Prosper Australia’s President Catherine Cashmore, who authored the report, said. She added that the Victorian government’s attempt to build more houses to reduce accommodation costs was not working. There is no evidence if the properties were being used. “It doesn’t matter whether they’re foreign owned or investor owned the economic cost to us is enormous,” Cashmore said.

According to the report, it has been found that the majority of vacant houses belong to student-heavy area across Melbourne’s inner north location, Carlton, raising the rents to significant heights mostly for international students.

Contact the writer at feedback@ibtimes.com.au, or let us know what you think below:

RELATED STORIES