CBD markets collectively recorded positive net absorption, where occupied office space at the half year exceeded occupied office space at the beginning of 2026, and premium grade vacancy decreased by 1.2 per cent to 10.2 per cent.
Overall national office vacancy increased modestly from 15.8 per cent to 16.1 per cent over the six-month period, while CBD vacancy remained stable at 14.9 from 14.8 per cent.
Positive demand for office space was concentrated in Brisbane, Perth, Melbourne and Sydney CBDs. Brisbane CBD recorded the strongest net absorption nationally during the six-month period at 38,785 square metres, followed by Perth CBD with 27,528 square metres and Melbourne CBD with 26,779 square metres.
Property Council Chief Executive Mike Zorbas said the results reflect a new market phase.
“The office market has moved from the correction phase to the recovery phase, but it remains a story of quality and location. Major occupiers are seeking the best buildings,” Mr Zorbas said.
“Businesses in general continue to seek workplaces that support collaboration, attract talent and provide the offerings people value.
“Brisbane and Perth are again showing the strongest demand nationwide.”
The report also found that sublease availability continued to shrink across several major markets, pointing to gradual normalisation after the workplace disruption of recent years.
While demand remains evident in a number of CBD markets, development activity remains subdued. Just 176,303 square metres of office space was completed nationally during the first half of 2026, the lowest level recorded since July 2017, with a further 167,171 square metres expected to come online during the second half of the year. The office supply pipeline remains well below long-term averages and is likely to remain subdued to 2029.
Mr Zorbas said office development remains highly sensitive to investment confidence.
“Office towers are long-term investments and development decisions are made many years in advance with a view to occupier demand,” Mr Zorbas said.
“Planning efficiency, investment certainty and broader business confidence all influence the long-term attractiveness of development opportunities.
“The Victorian Government in particular needs to change course to a pro business mindset to support what should be Australia’s second largest economic engine.”
