Office vacancies hit 17 year high

Australia’s office vacancy rates have surged as a result of swelling supply and shrinking demand.

According to the Property Council of Australia, the office sector posted a 1.8% increase in vacancy rates in the six months to January 2009, from 4.2% to 6% – the largest six monthly rise in 17 years.

The increase came as 650,271 square metres of office space was added to the market, more than 2.5 times the historic average of 253,688 square metres.

Net absorption – the measure for demand – shrank at the same time to 156,171 square metres, compared to the historic six month average of 211,083 square metres.

Of all CBD markets, only Adelaide’s vacancy rate continued to fall, reaching 3.4%.

Canberra’s vacancy rate is now the highest at 8.5%.