Speculative Vacancies 11: Empty Homes in Melbourne

Summary

Speculative Vacancies 11: A Window onto the Economics of Waiting (July 2024) is the latest in Prosper Australia's long-running report series measuring empty housing in metropolitan Melbourne from water-meter data rather than survey or listing counts. The series pioneered consumption-based vacancy measurement and is the empirical backbone of the wiki's speculative vacancy concept page. Classification note: this is advocacy research — Prosper campaigns for land value taxation — with a transparent method that invites benchmarking; report its numbers as its own.

Method

Postcode-level counts of dwellings by annual average water use from Melbourne's three water retailers (Yarra Valley, South East, Greater Western), covering 233 postcodes and 93% of residential properties; 33 holiday-home postcodes are excluded, leaving 1.9 million dwellings. Dwellings using 0 litres/day over the calendar year are counted empty; those under 50 LpD (a quarter of single-person average use) are counted barely used. The report is explicit that these long-term vacancy figures "are not comparable to the rental vacancy rates reported by real estate analysts such as SQM and REIV," which measure advertised rental stock only.

Key Findings (2019–2023)

• "In 2023, 27,408 dwellings (1.5% of all homes) were left totally empty over the year, and a further 70,453 (3.7% of all homes) were barely used. Overall, 97,861 dwellings (5.2% of all homes) were vacant – equal to one in 20 homes across the city."
• Scale comparison: "Each year, around 37,000 new homes are built. The number of vacant homes equals more than two and a half years of new construction."
• Vacancy surged during the pandemic (total vacancy 3.9% in 2019 → 5.7% in 2021–22), easing to 5.2% by 2023 — evidence the stock of idle dwellings responds to market conditions rather than being a fixed friction.
• Beyond empty homes, the report argues vacancy is "just the tip of the iceberg" of land banking: "Speculation plays a much larger role in the practice of land banking, where land is parcelled out slowly to maximise future profits. There is clear evidence that developers strategically delay financially feasible developments."

Honest Benchmarks and Limits

• The report's own footnote 6 benchmarks against ABS administrative electricity data (mid-2021): "24,198 dwellings or 1.4% of the total recorded zero use, which is lower than the 1.9% in the water sample" — proxy choice moves the headline number.
• Zero water use cannot distinguish speculative withholding from renovation, probate, or homes between owners; the under-50 LpD band mixes second homes and genuinely under-used dwellings.
• Postcode-level data (used since privacy rules ended parcel-level access) is coarser than the earlier reports' property-level counts.

See Also

• Land underuse and speculative vacancy persist in high-demand cities — the outcome page this supports
• Speculative Vacancy · Land Speculation
• Prosper Australia · Real Estate 4 Ransom
• Segú, taxing vacancy in France — the peer-reviewed companion evidence

Sources

1. Prosper Australia (2024), Speculative Vacancies 11: Empty Homes in Melbourne 2019–2023, July 2024. PDF · report series index — used for all figures and quotes on this page (B-claims from advocacy research; quotes verified against the full report, accessed 2026-07-10).
2. ABS (2023), Administrative data snapshot of housing, as cited in the report's footnote 6 — used for the electricity-data benchmark (secondhand; not independently fetched).