In response to ongoing challenges faced by small businesses across the country, there are renewed calls for the federal government to incentivise a return to office work. With many businesses struggling due to the sustained impact of remote working, industry leaders are urging stronger government action to bring employees back to Australia’s city centres.
Recent data from the Property Council of Australia reveals that while office vacancy rates have slightly improved, they remain above historical averages. The national office vacancy rate has decreased from 14.8% to 14.6% over the six months leading up to July 2024, which is still 4.2% higher than the historical average. This marginal improvement highlights the ongoing struggle to bring workers back to central business districts (CBDs).
Impact on Small Businesses and Cleaning Services
Hannah Kasay, CEO of ACS Commercial Cleaning, has seen a dramatic shift in demand for her company’s services. "The demand for office cleaning has dropped significantly. Many of our clients have reduced their cleaning frequency from daily to weekly, and some have even cut back to once a month," Kasay noted. This decline mirrors the reduced foot traffic in offices, as many businesses continue to operate with a largely remote workforce.
Small businesses like Antica Barberia in Crows Nest, Sydney, are also feeling the pinch. "We lost a lot of office workers who used to keep the shop busy throughout the day," said owner Gianfranco Santo. "Things are much quieter now."
Similarly, Michelle, the owner of the small business and website Discover Melbourne, has experienced a change in the way her team works. Before the pandemic, her business rented desk spaces in a local shared office. "After COVID, we’ve stopped using these spaces because most of my employees now prefer to work from home. This shift is especially prominent among small businesses, where flexibility and cost savings have become a priority," she explained.
The impact is widespread, with vacancy rates in non-CBD areas dropping from 17.9% to 17.2%, while Sydney’s CBD office vacancy rate fell from 12.2% to 11.6%. However, not all cities have seen improvement—Melbourne, Canberra, and Perth recorded increases in vacancy rates, underlining the challenges that persist in certain areas.
A Call for National Action
The Australian Government's push to incentivise a return to office work is seen as crucial for the recovery of the country's business districts. With more workers returning to their physical workplaces, local businesses are expected to see a resurgence in foot traffic, which is essential for their survival and growth.
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