Demand Remains positive for Hobart office market
In a solid result, the desire for office space in Hobart’s central business district remained positive, according to new data released by the Property Council of Australia.
The Australian Office Market Report showed Hobart CBD’s office market vacancy rate held steady at 5.9 per cent, up marginally from 5.8 per cent over 12 months to January 2019.
Tasmanian Executive Director of the Property Council, Brian Wightman, noted that the market has tightened significantly due to tenant demand over the last three years.
“The Hobart office vacancy rate was the third lowest capital city behind the Melbourne CBD and Sydney CBD markets.
“The B, C and D grade vacancy rates have all decreased with the increase in A grade vacancy due to tenant relocations to outside market boundaries,” Mr Wightman said.
“Our office market is in healthy shape, in stark contrast to the challenges in our residential market where we are currently experiencing a housing supply crisis, exasperated by a lack of strategic planning for the state’s future, and a decrease in private rental options available for University of Tasmania students.
“In the upcoming budget, the state government should consider stamp-duty concessions for infill and inner-city residential in the Hobart to Glenorchy transit corridor, up to the equivalent of the First Home Builder’s Grant.
“They should also prioritise long term planning for growth to create a smart city underpinned by the Hobart City Deal,” he said.
The Property Council encouraged all political parties to focus on initiatives which drive growth in Tasmania.
“State and local government should be encouraging investment through offering a range of incentives to develop exciting new projects which could be as simple as coordinating the raft of approvals that are required before even making a start.
“The state government must also remain cognisant of the impact of property re-valuations on land tax across the CBD. While pressure on investors will remain to upgrade stock, this may be limited by uncharacteristically high increases in land tax,” Mr Wightman said.
The Property Council of Australia encouraged community leaders to consider the positive impact of population growth, with the latest CommSec State of the State indicating Tasmania maintained a strong position of fourth as a result of net migration.
“Increasing Tasmania’s population through establishing an ambitious, intermediate population target for 2022 should also be a focus to drive continuous economic growth.
“However, for this to eventuate and remain positive, we must plan for growth and not leave housing supply and infrastructure provision to chance,” he said.
Media contact: Brian Wightman | E [email protected]