Figures from the Australian Institute of Health and Welfare show that one in six properties are classed as "underutilised".
The ABC reported that 200,000 Australians are reportedly on waiting lists for housing but a significant number of them can't find accommodation because larger homes are being occupied by single, elderly people.
NSW Federation of Community Housing’s Wendy Hayhurst blamed "under-occupation" - a large number of people living in homes that are too large for them.
"We've got a very rapidly ageing population, not just in public housing and social housing, but across Australia,” she told the ABC.
"And as they grow older and their children move away, they are left living in accommodation that's too large for them.
"It's not their fault, there just isn't the accommodation that's smaller near where they need to be — near their supports, hospitals. So they're stuck really."While publicly funded beds are increasingly left empty, the number of people on the waiting list continues to grow.
Underutilised property has been attributed as a cause for homelessness, with numbers on the rise as the homeless wait for openings in social housing.
Homelessness NSW’s Katherine McKernan said that the solution rested on the federal government and that more funding is needed to increase the construction and availability of single bedroom dwellings.
This strategy, in turn, would allow the elderly whose families have moved out of home and now live in dwellings larger than they need to occupy those spaces, freeing up more social housing opportunities.
"Really what we need is an expansion of social housing and an increase in smaller dwellings that suit singles and couples, so that this issue can be managed," McKernan told the ABC.
"There's such a huge waiting list and such demand on the stock — it's not a simple matter of just moving single people into smaller dwellings, because the smaller dwellings just aren't available."
