More Signs Of The Bursting Global Bubble – -Growing Swath Of Empty Houses Down Under

Australia’s three-year property boom is leaving Melbourne awash with empty homes.
In the country’s second-biggest city, growing numbers of local landlords and absent overseas owners have locked up their properties – forgoing rental income as they focus instead on price gains, a report by Prosper Australia said Wednesday.
Some 82,724 properties, or 4.8 percent of the city’s total housing stock, appear to be unused, said the report, which estimated occupancy rates by gauging water usage. In the worst-hit areas, a quarter of all homes are empty, said Prosper. The Melbourne-based research group is lobbying for more affordable housing through tax reform.
Driven by a wave of Chinese buyers and record-low interest rates, average home prices have soared to about A$700,000 ($505,000) in Melbourne and around A$1 million in Sydney. But with prices now cooling, the empty accommodation also masks a hidden glut of supply that could worsen any housing slump.
‘Those properties need to be utilized,’ said Catherine Cashmore, author of the Prosper report, Speculative Vacancies. ‘Having property sitting vacant has a very high cost on the economy. It’s very destructive to our national prosperity.’

This post was published at David Stockmans Contra Corner on December 9, 2015.