Australian Office Market Report | Q2 2026
Vacancy headlines don’t tell the full story.
National vacancy figures suggest occupiers have plenty of choice. In premium CBD stock, the reality is very different. With high construction costs stalling new development, prime space is tightening through lack of supply, and rents are rising accordingly.
Key takeaways
Supply drought: New office development remains uneconomic, so prime vacancy is falling because few new buildings are being delivered, not because demand is exceptionally strong.
Prime rents still rising: National prime effective rents rose approximately 7.2% year-on-year, despite elevated headline vacancy.
Core vs non-core: In Sydney, premium and upper A-grade space in the Financial Core is materially tighter than the 13.3% headline vacancy implies.
Windows of opportunity: Melbourne remains the most tenant-friendly CBD, with incentives of 38–42%, but that window may not last. Brisbane is now the best-performing major CBD, with prime vacancy below 8%.
What this means for occupiers
If your lease expires in the next three years, start planning now. We recommend starting relocation projects 18–36 months before lease expiry.
Inside the report: Macroeconomic outlook, national themes, and city-by-city analysis of Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. Covers vacancy, face and effective rents, incentives, absorption and the Franklin Shanks outlook for each market.
