Coronavirus: Work from home draining life blood out of Australian city centres

A stay-at-home sign in Melbourne. In both Sydney and Melbourne, the drain of residents and office workers has been devastating for cafes and retail outlets that add life and character to the downtown areas. PHOTO: AGENCE FRANCE-PRESSE
A stay-at-home sign in Melbourne. In both Sydney and Melbourne, the drain of residents and office workers has been devastating for cafes and retail outlets that add life and character to the downtown areas. PHOTO: AGENCE FRANCE-PRESSE

Australians have been heeding advice to work from home during the pandemic, but the move is taking a heavy toll on the downtown property market and on the shops and cafes that give character to the central business district (CBD).

In Sydney, the country's biggest city, many office workers are now working from home, in line with the recommendations by the state government.

Melbourne, the country's second-biggest city, is even quieter as it endures a strict lockdown - including an 8pm to 5am curfew - following a recent surge of new cases.

Melbourne's Mayor Sally Capp revealed last week that current foot traffic in the CBD was down about 90 per cent compared with the same period last year. "The city hasn't been this empty for this long in living memory," she said.

Adding to the sudden quiet in Australia's major city centres, curbs on international travel have led to a sharp drop in the number of international students and foreign workers. Many of these temporary visitors tended to stay in and around the CBD.

Property research firm SQM Research said last week that vacancies in Sydney's CBD had almost doubled since last year. As of July, 13 per cent were vacant, compared with 7 per cent in July last year. In Melbourne, the vacancy rate was about 9 per cent, up from 3 per cent in July last year.

Rental vacancies across the country are now "extraordinarily high", said SQM Research founder Louis Christopher, who expects this to be the case until borders open.

As of Saturday, Australia had recorded 23,036 cases of Covid-19 and 380 deaths. The state of Victoria is now in the grip of a serious outbreak. Of the 313 new cases recorded on Saturday, 303 were in Victoria, nine were in New South Wales and one was in Western Australia.

The pandemic has caused serious economic damage, with the unemployment rate at 7.5 per cent last week, the highest level in 22 years. Australia's central bank, the Reserve Bank, expects unemployment to reach 10 per cent by the end of the year.

In both Sydney and Melbourne, the drain of residents and office workers has proven devastating for the cafes, restaurants, clothes stores and other retail outlets that add life and character to the skyscraper-filled downtown districts.

In Sydney, just 17 per cent of businesses in the city centre are running as normal, with 62 per cent operating in a limited or changed capacity, 20 per cent temporarily closed and 1 per cent shut permanently, according to research by the City of Sydney. Of those stores still open, 80 per cent have cut back on staff hours and 40 per cent have cut staff numbers.

A barber in the city centre, Mr Fedl Babka, said he worked opposite an office building that used to be occupied by 2,000 workers each day, but that is down to just 100 now. He estimated his business could survive only another three to four months unless customers return to the city. "If we have a second wave, it will be a big hit for businesses. We will disappear for sure," he told ABC News.

The city of Sydney has provided grants to struggling small businesses. Business groups have also called for councils and businesses to find ways to adapt to the current restrictions. The Committee for Sydney, an independent think-tank, said last week that councils should consider closing streets to traffic to allow extra outdoor space for dining and performances.

"We want to see councils making it as easy as possible for businesses to operate outside and closing some streets to traffic to allow more space for people to congregate (outdoors)," the committee's chief executive, Mr Gabriel Metcalf, told The Sydney Morning Herald. "We also want to see mandatory face masks worn in a lot of indoor spaces, which will help to stop the spread of the virus and give people confidence that it is safe to go out."

Join ST's Telegram channel here and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on August 17, 2020, with the headline Coronavirus: Work from home draining life blood out of Australian city centres. Subscribe