According to the latest PCA Office Market Report, Australia’s CBD office vacancy rate increased marginally from 13.6 to 13.7 per cent over the six months to January 2025, while non-CBD markets held steady at 17.2 per cent.
Major cities showed different trends, with Sydney’s vacancy rate increasing from 11.6 to 12.8 per cent due to a significant new supply of 164,552sq m being added, well above the historical average of 74,361sq m.
Property Council Chief Executive Mike Zorbas said the market continues to see strong supply levels while maintaining positive demand.
“We have continued to see the supply of new office space above or near the historical average, providing access to a wealth of new, high-quality office space in our cities,” Mr Zorbas said.
Perth and Adelaide saw particular strength, with vacancy rates decreasing to 15.1 per cent and 16.4 per cent respectively.
Melbourne remained stable at 18 per cent, while Brisbane saw an increase from 9.5 to 10.2 per cent.
Knight Frank National Head of Leasing, Andrea Roberts, said there has been increased market activity in early 2025.
“After a challenging middle of 2024, enquiry levels from November 2024 onwards have pleasingly increased,” Ms Roberts said.
“Most recently, particularly in Sydney, activity levels and demand have been at one of the highest levels for January in recent years.”
The next six months are expected to see 333,000sq m of new supply enter the market, significantly above the historical average of 237,554sq m, spread across major capital cities.
Knight Frank’s Queensland Head of Office Leasing, Mark McCann, said he was optimistic about Brisbane market’s outlook.
“We expect vacancy to remain below 10 per cent until the second half of 2025. While the quantum of net absorption is likely to reduce in the short term, it is forecast to remain positive,” Mr McCann said.
“High levels of supply show that businesses still call our CBDs home as they balance flexible working arrangements with face-to-face contact in the office,” Mr Zorbas said.
