A new report has found alarming levels of empty homes and apartments in Melbourne, with almost 20 percent of investor-owned properties vacant.

Speculative Vacancies 8: The Empty Properties Ignored by Statistics, written by Catherine Cashmore for the think tank Prosper Australia, found that 82,724 properties (about 5 percent of the city’s total housing stock) used less than 50 litres of water a day – a reasonable indication that they are vacant (a leaking tap can lose such an amount). Nearly 25,000 houses used no water at all.

“This report gives ample evidence of an unused surplus, which indicates oversupply, rather than undersupply”, Cashmore wrote.

The report argues that the high rate of vacancies “is evidence of an urban land market rife with speculation that has forced a process of social polarisation in our sprawling suburbs”.

Speculative vacancies – created when investors buy properties solely to reap capital gains – create a significant economic burden. On one hand they inflate prices and put ownership out of reach of more people. On the other, the people who could otherwise live in them are pushed to the fringes of the city at greater cost and travel longer hours to and from work.

The situation is “a dire demonstration of a culture built on the self-interest of property owners in pursuit of windfall gains”, which Cashmore likened to a political game of Monopoly.

Rising property prices have been celebrated as a miraculous economic driver that increases consumption and boosts construction. But concern for the mounting burden of private debt needed to sustain it has been neglected – as have those who can’t find affordable accommodation.