The softening economic conditions have caused growth on office demands behind the decreasing vacancies of 8.3 per cent for July compared to 8.5 per cent in January 2019. The tightened office vacancy is driven by withdrawal of stock from the market rather than tenant demand.
The uncertain economic outlook would create opportunities and challenges for owners over the 2019 and 2020 financial years. Economic expansions and different organisations are expected to grow their real estate footprint along the CBD as they take part in the market competition. Melbourne and Sydney remain Australia’s strongest and best performing CBD markets with very tight vacancies.
Office markets are noted to provide a unique window into business activity and may show minimal pickup in demand. Net tenant demand for the CBD grew by just 0.1 per cent for the first half of the year which is noted to be its lowest growth in over four years. Behind this condition, analysts foresee a positive future for this business since majority of the latest jobs typically require office accommodation.
Image and article source: https://www.propertyhq.com.au/news-blog-and-research/softening-economy-puts-breaks-office-space-demand/?
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