The Australian office market has seen strong net effective rental growth over the past 12 months with average gains of 8.8 per cent, according to C B Richard Ellis. In New Zealand, rental growth was more subdued at 3.7 per cent. Prime office rents in Sydney's central business district (CBD) reported a 7.4 per cent growth to A$465 (HK$2,320) a square metre a year. C B Richard Ellis said low levels of available stock had lead to a moderate net absorption rate of 6,200 sq metres in the first half of the year but the amount was expected to rise to 62,000 sq metres for the whole year due to the addition of large projects. The markets showing the strongest growth were the prime offices in Perth's CBD, with a 32 per cent rise in the past 12 months, those in Melbourne's CBD, with 28 per cent, and Brisbane's CBD, with 15 per cent. The consultant said although the rental growth had been strong in these cities, it should be emphasised that they were coming off relatively low bases and well below their peaks in the late 1980s. 'The main factors for the rental growth have been falling vacancies, steady demand and virtually no new construction activity,' the consultant said. Average effective rents for CBD prime offices in Perth were $178 per sq metre, the rates in Melbourne were $153 and those in Brisbane $170. CB Richard Ellis said the market with the largest rental falls over the past 12 months was Canberra - down 30 per cent for secondary offices and down 9 per cent for prime premises. The decline was a result of oversupply and contracting government employee numbers, the firm said. Office vacancy rates declined slightly in Canberra but were expected to increase again next year as some Commonwealth tenants moved to pre-arrangement purpose-built and refurbished facilities, it said. Negative rental growth was also recorded for Chatwood, on Sydney's North Shore, where prime office rents fell 10.5 per cent. In Auckland, the last quarter had been characterised by a largely static occupancy market, while landlords were working hard to retain existing tenants. Investment activity had been low and the gap between investors' price expectations and those of the vendors had been difficult to bridge, the consultant said. In Wellington, large organisations were rationalising and reviewing their space requirements and no new development was expected to commence in the short term.