Demand for Australian office space has recuperated after the global financial crisis, with research from the Property Council of Australia showing figures over the last six months at twice the 20-year average.

The latest Office Market Report from the Property Council indicates net absorption, the primary indicator of demand for office space, was 332,922sqm over the six months to July, almost double the 20-year average of 171,350sqm.

But even with this speedy recovery, the volume of new office space added to the market, which was also well above the 20-year average, pushed total Australian office vacancy from 9.3 percent to 10 percent, the highest since July 1999.

A total of 571,142sqm of new office supply entered the market over the past half year, far above the 20-year historical average of 316,635sqm.

"Such a swift rebound in demand for office space is yet another sign of the relative health of the Australian economy," said the Property Council's acting CEO Ken Morrison.

"After two years of low or negative demand, this is a surprisingly strong result."

"However with business confidence still patchy and continuing concerns about global uncertainties, there are plenty of reasons to remain cautious about the future."

"Despite the positive demand story, the big supply increases and low stock withdrawals have pushed vacancies up to 10 percent, a result other countries will still envy."

"At the depth of the GFC not many people would have predicted just a 10 percent vacancy rate and such strong demand figures at this early stage."

According to Mr Morrison, the future office supply pipeline is slowing. The Office Market Report indicates a total of 327,721sqm of office space is to be introduced to Australia's markets in the second half of 2010, in line with the 20-year average of 316,635sqm.

In 2011, a total of 404,071sqm is scheduled to be injected. The average historic annual supply average is 632,624sqm said the Property Council's report.