The Reserve Bank of Australia’s (RBA) latest monthly statement included an analysis of the impact of COVID-19 on the commercial property sector. It noted that most companies are adopting a ‘hybrid’ model for their office staff, which sees staff given an option of working from home for part of each week.
The RBA found that around a quarter of companies were cutting their office ‘footprint’ by an average of 25% as a reaction to changing work patterns. This, in turn, would dampen office construction in the years ahead:
Office vacancy rates have risen sharply in Australia since the onset of the pandemic. This has been most pronounced in Sydney and Melbourne, where recommendations that employees work from home were in place for longer and large volumes of office space have arrived on the market since the pandemic began (Graph B.1). There has been little demand for the office space left vacant by firms moving into newly completed properties.
The full text of this article is available to MacroBusiness subscribers
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
