Tumbleweeds are forming along the Terrace in Perth as vacant office space grows.
The Property Council of Australia’s latest report found the vacancy rate in the CBD was 14.8 per cent in January, its highest level in almost two decades and a three per cent jump in just six months.
And while premium-grade buildings were the only category to report a single digit vacancy rate of 8.5 per cent, that’s almost double its rate from July last year.
Executive director Joe Lenzo said the lack of demand was a reflection of Western Australia’s economic performance and in line with industry expectations.
“The office market in Perth is the barometer for the state’s economy,” Mr Lenzo said.
“At the same time, we are undergoing a spike in CBD office stock with 149,601 square metres due to come online in 2015.
“Longer term, there is great optimism for Perth as the commercial office market stabilises.”
In July, Dexus Property Group chief executive Darren Steinberg predicted the Perth vacancy rate would peak at 16 per cent over the next couple of years as resources companies continued to trim their office space.
And in December, BIS Shrapnel forecast the CBD vacancy rate would peak at a whopping 23 per cent in 2018.