Published on August 14th, 2012
Commercial property in Melbourne is ripe for the picking
Melbourne's CBD is continuing to grow but at a slightly slower pace than in previous years, according to one source.
Former head of research at CBRE and property consultant Kevin Stanley said that net absorption of office space in the city was close to trend.
Speaking in front of 300 people at the Property Council of Australia luncheon on August 6, the real estate expert told listeners that so-called doom and gloom reports about Melbourne commercial property were often inaccurate.
According to reports in the Age, Mr Stanley made it clear that the city's current expansion rate was not the same as in the mid-2000s.
He was also quick to point out that this didn't spell disaster and that Melbourne was on track to return to its long-term average.
Vacancy rates in the city have increased over the last 12 months, jumping from 5.2 per cent to 5.6 per cent, which has been a point of concern for many people in the real estate sector.
However, this figure is still relatively low given recent market conditions and ongoing challenges facing the world economy.
Jennifer Cunich, the Victorian executive director of the property council, said that vacancy levels were a "legacy of the GFC" rather than the result of poor planning.
"Despite Melbourne's relatively low vacancy rate, the sector's long-term health remains highly dependent upon future demand levels," she told The Age.
"As a legacy of the GFC, Melbourne's developers have become dependent upon pre-commitments to secure project funding. Consequently, attracting future tenants to Melbourne remains vital to the sector's future."
Greater opportunities for work, affordable housing and continuing education programs may help Melbourne attract new residents while helping to reduce vacancy rates in the process.