A lot of them are not buying to rent out, especially if they are Chinese where in china renting out doesn't make sense. They sit on the properties empty as pure speculative plays.

I don't know Australia or New Zealand, but in London that is demonstrably not true: The proportion of empty properties in the areas that are attractive for investment is the same as elsewhere, and the proportion of empty council housing is pretty much the same as empty luxury housing. As it happens, most long term empty properties are empty for other reasons, such as waiting for re-development of the property, or large scale renovations and the like, or issues with sorting out ownership following death etc..

Sure, a few are left empty by owners who just don't care, but there's very little indication this number is high. Especially as in most countries there are rental management companies that makes it trivial to rent out a property even if you're an absentee landlord.

I don't know about London, but in lots of these places, occupancy is determined on the honor system. They don't check power/water consumption or lights on at night like other places. In china, you just need to count the lights on at night to see how big the problem is, or peep through the door to see that the unit is still not even renovated. They did a study a while back using power consumption stastistics that was quickly hushed up as a state secret.

In Vancouver, the problem is so bad that local shops are going out of business for popular speculative properties because their just isn't enough residents to use them, even though prices are sky high and the developments are all bought out.

Speculation always drives empty units.

If you’re well capitalized it is often cheaper and less hassle to leave them empty. Renting is a pain in the ass and makes unloading the property harder.

Not sure I understand what you said.

Example: I want to hire 10 developers. There are no places to live with price tags less than 1.5 mln in 1 hour commute radii from here. What would be my options? To pay them enough salary so they can afford mortgages? Cheaper to move the whole business to Eastern Europe / Russia then.

I don't understand what you think the relevance of that is to the effect foreign buyers have on house prices.

The house market is split between people buying and renting. When people buy as an investment, it does drive up purchase prices, but unless they leave it empty rather than rent out, it drives down rental prices by increasing supply. Rental properties also tends to provide more density, as they are more likely to be occupied by sharers, and so increasing the rental supply is likely to soak up more demand than the reduction in purchase opportunities. Eventually the prices reach some degree of equilibrium, because bidding up the purchase prices much quickly becomes unprofitable as rental prices are pushed down.

Ultimately what is driving the cost up is mainly down to more people with enough money who wants to live in a given location, not investors, as if there wasn't demand to live there it'd quickly prove a bad investment.