The wind down of the mining investment boom is hurting Western Australia's commercial property market, with growing vacancies in office space.
Confidence is weak among all sectors of Australia's commercial property market except for CBD hotels, figures from National Australia Bank on Wednesday show.
Conditions in the office, retail (shops) and industrial (factories) property markets were weaker in the June quarter, according to the NAB Commercial Property index.
The overall index was down six points but in Western Australia, it was down 20 points, said NAB chief economist Alan Oster.
"It's very obvious that Western Australia is very negative at present, there's some pretty big slowdown effects there," Mr Oster said.
"What we're seeing in WA is yes, you're still getting very strong growth in gross domestic product, because exports are really strong, but domestic demand is actually negative in WA because not as much investment is going on.
"They don't need as many people as they used to, so there's more office space around.
"You don't need as many people to run existing mines as you do to build new ones."
The commercial property market is mostly concerned about stock availability and government regulations and red tape, the survey showed.
CBD hotels remained the shining light of the market with strong conditions and expectations, Mr Oster said.
"What's happened is that they're not building any CBD hotels anymore but demand is still reasonably strong, so if there's no new supply and demand is going up, there's a shortage," he said.
"Vacancy rates are going down big time, so you can charge more money and get better returns."
The results are based on a survey of 280 industry experts including property developers, investors and real estate agents, who are asked about conditions and expectations for capital values, rents and vacancy rates in the commercial property market.
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