Homeowners saddled with mortgages are set to be hit with another financial obstacle as 200,000 new properties are built.

Australia was already home to one million empty properties on Census night in August 2016, during a boom in house prices.

During that time, apartment developers began building thousands of new projects hoping to cash in on demand for homes as Sydney and Melbourne real estate values surged by double-digit figures every year.

These projects are expected to be completed in 2019 and 2020 as Australia's biggest cities grapple with the worst housing market downturn on record.

This is bad news for home owners already in debt who want to sell fast but good news for young people wanting to buy their first property at a discount.

Homeowners saddled with mortgages are set to be hit with another financial obstacle as 200,000 new properties are built (pictured are Sydney apartments under construction)

With investors already deserting the housing market, Digital Finance Analytics founder Martin North said there would be an oversupply of new homes, which would put more downward pressure on prices.

'Now we know there's another 200,000 new properties coming on stream this year and next year based on the approvals over the last two or three years,' he told Daily Mail Australia.

Mr North said homeowners forced to sell - because of a divorce, illness or job loss - would be in a particularly bad position.

'If you are actually needing to sell, you have to sell at whatever price: you can't assume you're going to get the full, shiny market value,' he said.

Mr North questioned the Reserve Bank of Australia's suggestion high immigration will fuel a recovery in real estate prices.

'We've already got supply on stream to meet any need for migration,' he said.

Australia was already home to more than one million vacant properties in 2016 even when property prices were booming in Sydney (pictured are for lease signs in the inner city) and Melbourne

'Playing the migration card and saying we need to build more properties and prices will go up because of higher migration is actually a bit of a fallacy.'

The central bank last week predicted high population growth would 'continue to support demand for housing over the medium-term', in the minutes of its April meeting.

The Reserve Bank was also optimistic that low interest rates and low unemployment would drive a recovery in apartment prices, even though investor demand has plummeted in Sydney and Melbourne during the past two years.

Interest rate policymakers appeared to overlook Australian Bureau of Statistics figures which showed that on Census night in August 2016, one million properties were empty nationwide.

'We've still got a million properties vacant in Australia,' Mr North said.

Despite the surge in permanent migrants and international students, the number of vacant properties in Sydney surged from 15,833 to 21,942 in one year (pictured is Sydney's Wynyard station at peak hour)

'We have a lot of spare properties in the market currently so the myth that we need to build more properties to meet migration demand is actually just that, it is a myth.'

Since peaking in July 2017, Sydney's median house price had dived by a record 16 per cent, or by more than $169,000, after the Australian Prudential Regulation Authority cracked down on investor and interest-only loans.

Australian house woes Sydney, down 11.8 per cent, to $880,594 Melbourne, down 12.4 per cent, to $718,443 Brisbane, down 1.3 per cent to $538,544 Adelaide, up 0.7 per cent to $460,673 Perth, down 7.6 per cent to $467,783 Hobart, up 5.7 per cent to $493,237 Darwin, down 3.2 per cent to $478,191 Canberra, up 3.9 per cent to $669,911 Source: CoreLogic Home Value Index for March 2019 showing annual movements in median prices for detached houses Advertisement

Real estate values have plummeted, despite Australia's net annual immigration rate soaring to a five-year high of 299,190 in the year to February 2019, with the population increase from overseas arrivals and international students rising by 11.4 per cent.

Overall immigration, before departures were factored in, had surged to a record high of 844,800.

Despite the surge in permanent migrants and international students, the number of vacant properties in Sydney surged from 15,833 to 21,942 in one year.

Put another way, Sydney's rental vacancy rate climbed from 2.3 per cent to 3.1 per cent, SQM Research data released last week showed.

With national property prices already sliding, Mr North said Labor's plan to scrap negative gearing for future purchases of existing homes, from January 2020, would only deter a small proportion of potential investors.

'To my mind, it's going to have only a very small, negative impact: I reckon it's 0.25 per cent or so on the value of property. It's not a big deal, ' he said.

'Given the fact that prices are already sliding, investors are really not buying much at all.'