Melbourne's office vacancy rates have hit a 10 year low of 3.6 per cent - the lowest vacancy rate in Australia.

Meanwhile, office market vacancy rates fell across the rest of the country, as CBD office vacancies tighten.

Key findings from the Australian Office Market Report :

• Office market vacancy rates across Australia fell from 9.6 per cent to 9.1 per cent over the six months to July 2018
• Melbourne CBD recorded the lowest vacancy in a decade at 3.6 per cent. 
• Sydney CBD market has also tightened further, with a vacancy rate of 4.6 per cent, down from 4.8 per cent six months ago
• Brisbane CBD shows a welcome return in market activity with vacancy across the CBD dropping from 16.1 per cent to 14.6 per cent
• Perth CBD has passed its peak vacancy, with both the CBD and West Perth recording drops in vacancy, although at 19.4 per cent the CBD vacancy rate in Perth is still above the national average
• Adelaide’s CBD office vacancy rate has dropped for the third consecutive period down to 14.7 per cent, with fringe vacancy also dropping
• Canberra CBD recorded a vacancy decrease over the six months to July 2018, decreasing from 13.2 per cent to 12.5 per cent

"Office vacancy rates are a good measure of economic performance, and Melbourne is clearly the stand-out performer of the nation," said Ken Morrison, Chief Executive of the Property Council.

"Melbourne is our fastest growing city and best-performing economy which in turn is creating strong jobs growth and demand for office space at more than twice its historical average. Most of the country’s future office supply over the next three years will be built in Melbourne, which is exactly where you want it – responding to strong demand," Mr Morrison continued.

"While Melbourne is performing strongly, the Sydney market has also tightened further, with a CBD vacancy rate of 4.6 per cent, down from 4.8 per cent six months ago," Mr Morrison said.

Mr Morrison says the results of the report shows there are challenging times ahead for lower grades of commercial office stock. 

"Across the country, we are seeing a shift towards premium office quality, but a more challenging outlook for lower grades of stock," Mr Morrison told WILLIAMS MEDIA.

"The challenge for planners and owners is to come up with solutions to encourage the utilisation of secondary office stock to help meet future demand and support vibrant and affordable commercial districts in both CBD and non-CBD areas," Mr Morrison said.

Meanwhile, the non-CBD vacancy rate increased by a percentage, from 8.9 per cent to 9 per cent over the six months to July 2018.

The top three non-CBD markets are East Melbourne (3.1 per cent), Parramatta (3.2 per cent), and Macquarie Park (5.4 per cent).

Five of the top ten performing non-CBD markets are in New South Wales; Parramatta, Macquarie Park, North Sydney, Chatswood, and Crows Nest/St Leonards.

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