Figures | Adaptive Spaces

Australian Office Market Q4 2022

February 1, 2023

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Key Points:

  • The labour market appears to have stabilised after a strong period of job growth. The unemployment rate remains at 3.5%, however 14,600 jobs were lost in December.
  • Office demand softened in H2 2022, with 30,900 sqm of net absorption across all Australian markets. However, prime demand remained robust at 143,100 sqm.
  • National vacancy edged up to 13.3% in December 2022, from 12.9% in June 2022, as new supply outstripped demand.
  • Face rents continued to grow in most markets due to inflationary pressures, up 1.2% q‑o‑q and 4.9% y-o-y across the national CBD markets.
  • Incentives have slightly trended down over the past 12 months from an average of 38.6% to 38.0% in Q4 2022.
  • Sales volumes dropped significantly as higher interest rates slowed activity.
  • Yield softening has begun across all markets.