The number of empty houses and apartments in Melbourne is much higher than traditional estimates, with as many as one-fifth of all investor-owned properties lying empty, according to a study of water usage by think tank Prosper Australia.

Victoria leads the country in terms of new housing approvals and planning authorities gave the tick to 70,472 new dwellings in the 12 months to October – more than half of them apartments – but the Prosper figures indicate that while local and offshore investors are hungry for properties, they are not necessarily making those homes usable housing stock.

"There is an oversupply of housing that's not being used," said Catherine Cashmore, Prosper President and author of the report. "When the Victorian government talks about the need to build more housing to bring down prices, that strategy isn't working. We don't have anything to ensure those homes are being utilised. It doesn't matter whether they're foreign owned or investor owned the economic cost to us is enormous."

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A total 82,724 properties used less than 50 litres per day – the equivalent of a dripping tap and far less than a single person's daily usage – suggesting they were effectively unoccupied, the data from retailers City West Water, South East Water and Yarra Valley Water shows.

That's equivalent to 4.8 per cent of greater Melbourne's total housing stock and 18.9 per cent of all investor-owned housing stock.