The January 2025 edition of the twice-yearly Office Market Report showed Australia's CBD office vacancy increased marginally from 13.6 to 13.7 per cent over the six months to January 2025, thanks to increased supply and despite positive demand in four capitals.
The non-CBD office vacancy rate stayed at 17.2 per cent, with the overall vacancy rate for both the CBD and Non-CBD markets increasing 0.1 per cent to 14.7 per cent.
The five major cities saw a divergence in vacancy rates, with Adelaide and Perth seeing vacancy decreases, Melbourne remaining steady, and Sydney and Brisbane seeing increases commensurate with new supply.
Sydney's office vacancy rate increased from 11.6 to 12.8 per cent driven by 164,552sqm of new supply being added over the last six months, well above the historical average of 74,361sqm.
Melbourne's vacancy rate remained stable at 18 per cent and Brisbane witnessed a rise from 9.5 to 10.2 per cent.
Perth's vacancy decreased from 15.5 to 15.1 per cent while Adelaide's dropped from 17.5 to 16.4 per cent.
Canberra's office vacancy rates fell from 9.5 to 9.2 per cent. Hobart's vacancy increased from 2.8 to 3.6 per cent - the lowest vacancy rate in the country. Darwin enjoyed the largest decrease in vacancy rates, falling from 14.4 to 11.9 per cent.
Property Council Chief Executive Mike Zorbas said over 220,000sqm of new supply was added to our cities in the last six months, just below the historical average of over 237,000sqm.
"We have continued to see the supply of new office space above or near the historical average, providing access to a wealth of new, high-quality office space in our cities," Mr Zorbas said.
"Vacancy levels continue to be driven by this large level of supply, as demand has remained positive.
"Over the last three and a half years, positive demand for office space in our CBDs has been recorded in five of the last seven reporting periods. Sydney, Perth, Adelaide and Canberra saw positive demand for office space above their historical averages in the last six months.
"High levels of supply show that businesses still call our CBDs home as they balance flexible working arrangements with face-to-face contact in the office.
"Melbourne continues to have the highest CBD office vacancy in the country. We need to see active leadership from the state government to support the vibrancy of the CBD and help Melbourne remain one of the best cities to visit in the world," he said.
The next six months are set to see 333,000sqm supply come online, well above the historical average of 237,554sqm. This supply is spread out across Sydney (83,048sqm), Melbourne (54,327sqm), Brisbane (43,700sqm), Canberra (87,011sqm), Adelaide (23,826sqm) and Perth (41,193sqm).
On a longer timeframe, Sydney is set to see 277,048sqm of new office supply come online by 2027, with almost half of this space pre-committed to. In Melbourne, 252,627sqm will come online by 2027 with 26.9 per cent committed to, while Brisbane will see 162,630sqm of new supply with 67.9 per cent pre-committed to.
Sublease vacancy, a measure of business confidence reflected by businesses renting out parts of their office space, decreased in both the CBD and Non-CBD markets. Only Melbourne and Brisbane recorded a sublease vacancy above their historical averages.
For the full details about the Office Market Report and January 2025 results, click here.
