The Property Council of Australia says Sydney's CBD has suffered the biggest drop in demand for office space on record.

In the six months to July, vacancy rates rose from 5.4 per cent to 7.7 per cent - which is above the national CBD benchmark.

Walsh Bay was the only exception, with demand for office space increasing.

The council's Executive Director, Ken Morrison, says the figures are not surprising given the economic downturn.

But he says that he is concerned about new spaces planned in the next two years.

"We have seen a number of projects cancelled or deferred," he said.

"But there are still projects going forward so really all eyes will be on the demand for office space and those employment numbers to see whether those projects get filled up or not."