Australian Commercial Property Market: Insights and Outlook

It depends heavily on the city and the sector. For office, the Property Council’s July 2026 Office Market Report put national CBD vacancy at 14.9 per cent, but the spread between cities is wide. Brisbane recorded the lowest CBD vacancy in the country at 10.2 per cent, the first time it has held that position since records began in 1990. Sydney’s CBD improved to 13.3 per cent, while Melbourne stabilised at 18.9 per cent and remains the highest of any capital. The Gold Coast recorded the lowest office vacancy of any market nationally at 7.3 per cent.

Industrial is much tighter. CBRE’s first-half 2026 report had national industrial vacancy steady at 3.2 per cent, below the 4 per cent level generally considered balanced. Perth is the tightest at 1.0 per cent, followed by Adelaide at 2.0 per cent and Brisbane at 3.0 per cent. Sydney has edged up to 3.5 per cent and Melbourne sits at 4.7 per cent, with most of that vacancy in older buildings.

We source office vacancy from the Property Council of Australia and industrial vacancy from CBRE, and update each city page when new data is released. You can see the full trackers on the Sydney, Melbourne and Brisbane market pages.

Yields vary considerably by city, sector and asset quality, so a single national figure doesn’t tell you much. Based on what I’m seeing in active transactions, Sydney yields broadly range from around 5.25 to 7.50 per cent across sectors, Brisbane from about 5.50 to 8.75 per cent, and Melbourne from about 5.25 to 9.50 per cent, with industrial and logistics at the tighter end and secondary office and retail at the wider end.

The rate environment matters here. With four RBA rate rises in 2026, there’s upward pressure on yields for secondary assets, and some agency research has reported prime CBD office yields softening in several markets. Prime industrial and medical and allied health assets have held up best, supported by long leases and strong tenant covenants. Perth and Adelaide typically yield higher than Sydney and Melbourne for comparable assets, largely because of lower entry prices rather than weaker income.

These are observations from active transactions, not a formal valuation index. Whether a particular yield suits you depends entirely on your objectives, and that’s a conversation worth having with your financial adviser before you commit.

The market is in a more demanding phase than it was a year ago. The RBA has lifted the cash rate four times in 2026, to 4.60 per cent in September, its highest level since 2011, and has signalled it will move again if inflation doesn’t ease. That has reduced borrowing capacity and made serviceability the deciding factor in most deals we see. Fuel-exposed businesses, such as logistics operators and trades with vehicle fleets, now face an additional stress test with current fuel costs applied.

The underlying market is still active. Ray White Commercial recorded $87.8 billion in transactions in FY2025–26, up 25.7 per cent, and domestic investors stepped in as offshore buying eased. Industrial remains fundamentally undersupplied, retail has delivered the strongest returns of the core sectors, and medical, childcare and aged care assets recorded a sharp jump in activity.

Office is the most location-specific. Brisbane, the Gold Coast and Perth have tight or tightening office markets, while Melbourne CBD is still absorbing new supply. If you’re considering an office purchase, the building quality and precinct matter far more than the broad sector trend. You can read my current read in the Broker’s Pulse section above, which I review quarterly from active deal flow.

On returns, retail leads. PCA/MSCI data for the 12 months to March 2026 showed retail total returns of 9.9 per cent, ahead of industrial at 8.5 per cent and office at 6.3 per cent. Industrial and logistics remains the most traded sector and still has the most consistent lender appetite across all major cities, although valuers are now more careful with older stock and short lease expiries.

Owner-occupier transactions continue to attract the best LVR and pricing conditions, because lenders generally favour business owners buying their own premises over a comparable investment purchase. Medical and allied health assets are among the easiest to finance, including through SMSF structures, thanks to long leases and essential-services tenants.

Neighbourhood and sub-regional retail has recovered strongly. CBD office is still the most lender-selective sector, with approval depending far more on asset quality, location and lease covenant than on sector-wide appetite.

Three city pages are live with verified vacancy data, broker-observed yields, sector conditions and precinct analysis: Sydney, Melbourne and Brisbane. Perth, the Gold Coast and Adelaide are in preparation and will be published once each city’s data reaches our publication standard. Until then, the comparison table and map above give you the best cross-city view we can currently provide, including published vacancy figures for those markets where available.

Published reports from CBRE, JLL, Knight Frank and the Property Council are genuinely useful, and we reference and link to them on each page because the data is credible. The limitation is timing: by the time transaction data is compiled, verified and published, it usually reflects conditions from three to six months earlier.

What I track here is what lenders are doing right now, drawn from active submissions across our panel of 60+ lenders: which lenders are competitive in each market, where LVR policy has tightened or loosened, where valuations are coming in short of purchase price and how sector appetite is shifting. That forward-looking, transaction-level view comes from being in the market every week. You can see current commercial property pricing on our rates page.

I’m Nadine Connell, principal of Smart Business Plans, and I write or compile every observation in this section. I’ve been arranging commercial property finance across Australia since 2009, with over $550 million in settled transactions across every major city and most property types. The market observations come directly from that active deal flow, not from data aggregators.

Vacancy data comes from published sources, mainly the Property Council of Australia and CBRE, with source attribution and dates noted on each page. The lender appetite signals, Strong, Improving or Selective by sector, are my direct assessment from current submissions. They’re professional observations from someone writing loans every week, not a formal statistical index, and I think that distinction matters.

No, and it’s worth being clear about that. The content throughout this section represents professional observations based on active commercial finance activity. It’s general in nature and does not constitute financial product advice, investment advice, or a recommendation to acquire or dispose of any property or financial product. Commercial property decisions are significant ones, and you should consider your own objectives, financial situation and needs carefully, and seek independent professional advice before making any financial or property decision. Smart Business Plans Pty Ltd (CR553930) is an authorised representative of Loan Market Services Pty Ltd (ACL517192).

Yes, you’re welcome to reference and cite the observations published here, and I genuinely encourage it. The one condition is that you attribute the content to Nadine Connell at Smart Business Plans and link back to the relevant page. Third-party figures such as vacancy rates should also be credited to their original source. The observations are original professional commentary and shouldn’t be reproduced in full without permission. If you’re a journalist, researcher or analyst and would like to discuss anything further, feel free to get in touch directly.