Greg Brown from the Australian writes: DEEP public-sector job cuts over the next four years will push up Canberra's office vacancies and reduce rents for landlords, according to market analysts.
A Senate estimates hearing was told this week that more than 26,000 workers could leave the public service nationally over the next four years. However, the heavy job losses will be reviewed and final numbers are not known.
Finance Minister Mathias Cormann on Tuesday said the government's Audit Commission would be asked to review federal public-service staffing as it emerged that the Coalition plan to cut 12,000 positions would have to come on top of 14,473 positions being cut under Labor policies already in place.
The pain for Canberra's office market was not expected to be as severe as Brisbane's after the Newman government cut swiftly and deeply, with 14,000 public service job losses announced last year. Vacancies in Brisbane increased from 6.4 per cent at the beginning of 2012 to 12.8 per cent at September 30. Jones Lang LaSalle managing director Andrew Balzanelli said the cuts would cause two or three years of pain in Canberra. However, federal public workers were spread across Australia.
According to figures from the Australian Public Service, Canberra has 41 per cent of public servants, NSW 18 per cent, Victoria 16 per cent and Queensland 11 per cent.
MacroPlan's Chief Economist, Jason Anderson predicted that if 6000 employees left the public service in Canberra over four years, this would add 120,000sq m of vacant space to the market, which is 6 per cent of Canberra's office space.
Canberra office vacancy at the September quarter was 11.4 per cent. The public sector takes up 1.26 million square metres of Canberra office space, or 63 per cent.
MacroPlan's experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities. Contact Jason Anderson, Chief Economist today to discuss your property research requirements.