HOUSES bought by foreigners could be checked for water and power usage to see if they are unoccupied amid growing concern over the impact of overseas buyers on property prices.

Parliamentary Secretary to the federal Treasurer, Kelly O’Dwyer, said it was “completely perverse” for such homes to be left unoccupied, and there was evidence that some temporary residents were deliberately not renting out their properties to avoid scrutiny by the foreign investment watchdog.

“There were instances that we were being told about where properties were being built, developed and then ­unoccupied, and that this was a broader issue for our social fabric as a society,” Ms O’Dwyer told a recent forum in Melbourne’s outer east.

“And I think that’s a very genuine, very real concern to have.”

The Abbott Government is cracking down on illegal property purchases by foreigners after a parliamentary inquiry headed by Ms O’Dwyer strongly criticised the Foreign Investment Review Board for not enforcing existing rules.

A proposed minimum $5000 application fee for foreign buyers will be used to create a national database to monitor property transactions by non-citizens.

Ms O’Dwyer, who holds the seat of Higgins in Melbourne’s inner southeast, said the database could be used to cross-match water and power use at properties with owners to check if homes were being left unoccupied.

“It would be good to be able to work out exactly how broad and wide this problem actually is in practice,” she said.

Ms O’Dwyer also signalled the Government may look at further taxing foreign buyers amid local residents’ claims the $5000 application fee was too small to deter investors.

Hawthorn resident Roland Orchard, who attended the recent forum, said there was considerable anecdotal evidence that many houses in suburbs like Kew and Balwyn were being left unoccupied by foreign buyers.

“The consequences of allowing overseas people to buy and breach the rules is to create a housing shortage which is driving prices up,” Mr Orchard said.

Mary Drost, from residents’ group Planning Backlash, said foreigners were supposed to buy only new houses but many were demolishing existing properties to build new ones.

john.masanauskas@news.com.au

@JMasanauskas