H1 2025 Australia Lender Sentiment Survey

CBRE Research’s H1 2025 Lender Sentiment Survey received responses from 34 commercial real estate lenders across local banks, international banks and non-banks. We find:

• Australia’s cash rate cutting cycle is firmly underway, yet local pundits and lenders are the most divided in recent years as to what the terminal rate for this cycle will be.
• Appetite for new loans has held broadly consistent from H2 2024, with 56% of lenders wanting to grow commercial real estate exposures and no surveyed lenders intending to decrease their book.
• Lender investment preference continues to be dominated by the Industrial & Logistics sector, followed by Residential. Preference for the data-centre sector declined from its highs in H2 2024, whilst local lender activity remains cautious towards the office sector.
• Credit margins are facing upward pressure as they come off a cyclically low base, with a higher proportion (32%) of bank and non-bank lenders expecting margins to rise by at least 10bps over the next 3-months.
• Hedging requirements continue to decline, with over 2/3rds of lenders having an interest rate hedging requirement between 0-25%.
• More than 85% of surveyed lenders now have an LVR requirement of 50% or above, a significant increase from levels seen in H2 2024.
• Asset type and location are among the top three factors impacting lender appetite for refinance, as commercial real estate bifurcation rises across the country for all sectors.
• Secondary borrowers are moderately active in making building improvements to their real-estate, with fit-out improvements also common, but to a lesser degree.