High demand for office space in Melbourne’s CBD has seen vacancy rates decrease, despite an ever increasing supply of new office space. The predicted oversupply in the Melbourne market seems to be incorrect at least in the short term. The market did not predict such strong demand.
Property Council of Australia placed office vacancy rates across Australia’s CBD’s at 10.9% for January 2017, down from 11% 6 months prior.
The council published that “demand for office space grew over three and a half times the historical average in Melbourne and over five times the historical average in Brisbane.”
This is despite 90,924 sqm being added to the Melbourne’s CBD in the same period.
These figures come along side a two year high in confidence throughout Australia’s property industry in early 2017.
Perth’s vacancy rates are now at a staggering 22.5% and still climbing.
Melbourne and Sydney’s service based economies have helped drive unprecedented growth, despite the end of the resource boom that has seen resource dependent economies like Perth falter.
Technology and internet based business have rallied demand for office space in the these service driven economies. Big names like LinkedIn and Facebook now rent significant spaces in areas that were once dominated by traditional businesses. Smaller tech companies, startups, and online retailers have also taken up the slack.