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NEGATIVE supply in commercial property has led to a decline in Brisbane’s office vacancy rate, a new quarterly report has found.
The latest Midwood Queensland Investment Report shows the CBD office market vacancy rate declined by 7.4 per cent during the three months ending August 31, 2011.
Report author Bill Morris says the figure indicates that Brisbane does not require a new wave of mixed use developments to meet demand.
“There is less demand for office space due to the state of the economy. There are fewer businesses starting up due to the lowering of economic activity,” he says.
The volume of unconditional sales of new high-rise apartments in Brisbane is 133, representing a 46.6 per cent fall from the previous corresponding quarter. The number of new high-rise apartments for sale remains relatively high at 1550.
For the six months ending June this year, the value of work to be done on non-residential projects in Queensland is $8.96 billion compared with $11.20 billion from the previous corresponding period.
“The fact that work has decreased reflects that fewer new projects have been approved, particularly for offices,” says Morris.
Reserve Bank of Australia governor Glenn Stevens has expressed frustration about why housing cannot be made cheaper when there is no shortage of land. However, Morris believes higher standards and charges imposed on developers are lifting prices.
“All subdivisions have to have offsite sewage treatment plants instead of a septic tank, making it very expensive. New charges for building infrastructure such as stormwater drains have to be paid by developers that pass (the bill) on to consumers,” says Morris.
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