Australian Office Market Q3 2023

October 12, 2023 6 Minute Read

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Key Points:


  • Job vacancies have declined across Australia since their peak in mid-22, however they remain about 70% above pre-covid levels as of August 2023.
  • National rental growth has eased to 2.0% y-o-y (effective rent), however markets like Perth, Brisbane and Sydney are outperforming that figure.
  • Incentives have risen further to average 39.4% across Australia, partly due to higher vacancy in some markets as well as higher costs for fit outs.
  • CBD vacancy edged slightly higher in H1 2023 to 12.8%, from 12.6% at the end of 2022.
  • Investment market remains subdued with $1.4b worth of transactions in Q3. YTD volumes are 67% lower than the same period in 2022.
  • Yields continue to soften, given buyer activity has been subdued. National CBD prime yields have softened by 90 bps over the past 12 months to average 5.84%.