Melbourne vacancy rate falls to 7.0%

Melbourne’s office market has strengthened over the past six months according to the Property Council of Australia’s Office Market Report released today.

Victorian Acting Executive Director of the Property Council, Asher Judah, said the overall rate has improved from 7.8 per cent to 7.0 per cent over the six months to July 2016.

“Melbourne continues to host the second lowest vacancy rate amongst all of Australia’s CBDs,” says Mr Judah.

“A total of 87,768sqm of new stock is due to enter the market in 2016. No further space is in the pipeline in the short term, although 402,637sqm is mooted. During the last six months, 26,343sqm was withdrawn. Net absorption was 7,641sqm.

“The Docklands, Eastern Core and Civic precincts continue to have the lowest vacancy rates in Melbourne at 3.4, 3.6 and 4.2 per cent respectively.

“The Spencer precinct continues to have double digit vacancy at 11.9 per cent, down from 15.0 per cent in January. Negative demand was concentrated in the Flagstaff and North Eastern precincts where vacancy rates both rose to 8.3 per cent.

“Melbourne’s office market vacancy rate decreased over the last six months due to positive demand and withdrawals.

“Future supply remains a serious concern for the sector with only 87,768sqm of new stock due to enter the market this year, none forecast for 2017 and 75,023sqm expected in 2018.

“Government decision-makers should play close attention to these forecasts before finalising their position on the C270 central city planning reforms.

“The property industry would not recommend introducing commercial office development restrictions (C270) at a time when future supply growth is easing.”

For more information or to purchase the July 2016 Office Market Report, click here.

Media contact:  Asher Judah    E  ajudah@propertycouncil.com.au