A new trend has surfaced this year. People are staying away from the mining industry and other related sectors to the industry. Home builders in Australia like the Aveling Homes are set to gain lofty revenue because of this trend.
In Australia, there was over one million square meters that was leased in the country last year. Non mining sectors took about 80 percent of the leased spaces. Thirty five percent of the leased spaces occurred in Melbourne. This was according to the latest research of Savills Australia.
The report stated that at least 1 million square meters of office spaces were being leased in CBD and the suburban markets. The sector dominating in the leasing contracts were the property and business services sector. They leased at least 29 percent of the stock.
Non mining sectors in particular the government, IT and finance accounted for at least 50 percent in the leasing department. Other industries like the utilities and mining accounted only 17 percent of the total number of leased spaces.
The head of research for Savills, Tony Crabb, stated that the figures highlighted the new trend of people shifting away from mining and other associated industries into other sectors.
These figures were expected after the boom of the mining investment. Melbourne and Sydney were leading the cities in this new trend. On the other hand, Brisbane and Perth struggled to fully adjust to the new status quo.
This news puts Melbourne and Sydney in a favorable spot but this news in not well for Brisbane and Perth. It is important however to treat this news as a cyclical phenomenon rather than a structural one. Later on, it is expected that the mining states will recover as Melbourne and Sydney have recovered.
There is a fluctuating fortune in the vacancy rates among the non-mining states. Those that struggled the most had rates between 12 percent and 14 percent.
The head for research stated further that it is expected that at least 700,000 square meters of the occupied spaces will be withdrawn. This will lead to a very tight vacancy rate in CBDs.