Fresh push to get Aussies back to the office as vacancy rates fall
There is a fresh push for workers to return to the office as new data reveals the toll it’s having on Australian cities.
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There are fresh calls for the federal government to incentivise a return to working in the office as small businesses struggle to stay afloat.
New Property Council of Australia data has found CBD vacancies have fallen in more than half of Australia’s capital cities.
The office vacancy rate has fallen from 14.8 per cent to 14.6 per cent across the six months to July 2024 and is 4.2 per cent above the historical average.
Working from home has reportedly put a strain on small businesses, as Property Council of Australia group executive, policy and advocacy Matthew Kandelaars called for more incentives for people to work in the office.
“We need strong and ongoing government leadership to encourage people back into our cities,” he told 9 News.
“It’s the quickest and most cost-effective way to boost economic productivity.”
Gianfranco Santo from barber shop Antica Barberia in Crows Nest, Sydney, told 9 News that things were “quiet” at the moment.
“We lost a lot of office workers that used to fill up the day pretty well,” he said.
“Everybody looks a little bit quiet at the moment.”
The new data found demand for both CBD and non-CBD office spaces was positive for the first time since January 2023, while CBD vacancy rates remained stable, increasing from 13.5 per cent to 13.6 per cent.
Vacancy rates for Non-CBD areas dropped from 17.9 per cent to 17.2 per cent.
Brisbane’s vacancy rate has also dropped from 11.7 to 9.5 per cent, marking the first time the number has dipped below 10 per cent since January 2013.
Sydney’s CBD office vacancy rate has also dropped, falling from 12.2 per cent to 11.6 per cent, while Adelaide has dropped from 19.3 to 17.5 per cent.
Vacancies across the CBD increased in Melbourne, Canberra and Perth, with Property Council of Australia chief executive Mike Zorbas saying there is room for “cautious optimism” following the figures.
“It is pleasing to see vacancy levels fall in half of Australia’s CBDs,” he said.
“There is room for very cautious optimism in parts of the office market.”
He said office supply in CBDs continued to be a “driving force for vacancy levels as demand for office space has been positive”.
“This demonstrates businesses still see a CBD location as the best place to do business,” he said.
“In the last three years, four of the six reporting periods have recorded positive demand for office spaces in our CBDs. In Adelaide and Brisbane, demand is currently 5.9 and 2.7 times their historical averages, respectively.
“We continue to see a preference for high-quality office spaces, with Sydney and Adelaide being the only capitals to record higher prime vacancy than secondary vacancy.”
He added some older and lower-grade office buildings were being withdrawn from the market and repurposed, refurbished or turned into residential spaces and hotels.
“Of note, Melbourne still faces stiff challenges,” he said.
“The Victorian government simply has to get some of its workforce back a few days a week to support what must again be a thriving city.”
The federal government previously announced energy bill relief, with small businesses able to receive up to $325 to assist with bill costs over the 2024-25 financial year.
The calls for further incentives comes as experts predict a rate cut “before Christmas”.
A new Finder survey revealed one in four economists are expecting the first cash rate cut to happen by the time the RBA finishes its December meeting in what could be a Christmas miracle for homeowners across the country.
More than 80 per cent of the surveyed economists predict the cash rate will be held at 4.35 per cent when the board meets next week.
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Originally published as Fresh push to get Aussies back to the office as vacancy rates fall
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