Demand for office space has fallen to its lowest level since the early 1990s recession, pushing the amount of empty offices around the country up by 40% in the six months to July as the global financial crisis reverberates through Australian cities.

A combination of corporate collapses, business contraction and new building meant net absorbtion, or the demand for space, fell by 160,284 sq m for the six months to July, according to the peak industry body, the Property Council of Australia.

This compares with the historic average of 215,812 sq m of office space taken up around the country every six months, the council's July Office Market Report says.

The Australian