Melbourne’s rising “ghost properties”

A new report has shed light on the significant number of vacant and underused properties in the City of Melbourne. 

The Speculative Vacancies report released in July by Prosper Australia revealed that in 2023 the central city was home to some 10,000 “ghost properties”, with the number of empty dwellings in the municipality having almost tripled between 2019 and 2023. 

The report measured vacancy rates across metropolitan Melbourne using data from Melbourne’s three water retailers – Yarra Valley Water, South East Water and Greater Western Water. 

The study used two thresholds of water use to count vacant homes: “empty homes” (zero litres per day used over the calendar year), and “under-used homes” (between zero and 50 litres per day used over the calendar year). 

The report noted that in recent years the City of Melbourne had seen “by far the most significant growth in the vacancy rate and number of vacant properties”, which it said had “unsurprisingly” risen most during the pandemic. 

“The number of empty dwellings in the City of Melbourne almost tripled from 2019 to 2023, from about 800 to about 2200,” the report stated. 

“Including dwellings using less than 50 litres per day, the central city saw a total of 10,000 dwellings empty or underused in 2023 – a number equivalent to half of the dwellings added to the housing stock in this area by construction over the past five year.” 

“Vacancy rates over the pandemic unsurprisingly rose most in areas hit by the loss of foreign students and workers. Postcode 3000 (Melbourne) had over five times as many empty homes in 2021 as in 2019, and postcodes 3006 (South Wharf and Southbank) and 3053 (Carlton) had four times as many.” 

The report revealed that more than 97,000 homes across Metropolitan Melbourne, or one in 20, were currently vacant, and that around 30,000 people in Victoria had no home as of 2023. 

Prosper Australia said the report offered “a startling addition to Australia’s current debate about how to best solve the housing crisis” and that housing supply was “at the mercy of speculative incentives”. 

“It is wasteful for homes to sit idle while housing remains scarce and expensive,” a Prosper Australia spokesperson said. 

“Vacancy taxes are a reasonable short-term stopgap, but longer-term reform requires Australia to shift the tax base onto land.”