By: Kate Miller
Australia's office market has reached the highest vacancy rate in more than a decade with a tenth of capital cities' office space sitting empty.
Property Council of Australia figures released yesterday show the national office vacancy rate hit 10 per cent in July, the highest level since July 1999, as a plethora of new office space counteracted strong demand.
A total of 571,142 square metres of new office supply was added to the market over the past six months, well above the 20 year historical average of 316,635 square metres.
Net absorption - the primary indicator of office space demand - was 332,922 square metres of the six months to July, almost twice the 20 year average.
Despite the vacancy rate reaching its highest level in 11 years, Ken Morrison, acting CEO of the Property Council said the swift rebound in office space demand was a sign of the relative health of the Australian economy.
"At the depth of the GFC not many people would have predicted just a 10 per cent vacancy rate and such strong demand figures at this early stage."
According to the report only two CBDs' vacancy rates declined over the six months to July - Melbourne and Brisbane. Their vacancy rates now sit at 6.5 and 10.9 per cent respectively.
Sydney's vacancy rate climbed from 8.1 to 8.5 per cent while in Perth vacancy levels hit 9.9 per cent, up from 8.2 per cent.
In Canberra, vacancy rates reached a record high of 13.6 per cent while Adelaide's climbed to 7 per cent.