Australia’s office markets are showing positive signs, with declining vacancy rates in the first half of 2024 according to Colliers.
This improvement is driven by a halt in new supply in cities like Sydney and Brisbane, combined with strong leasing activity as occupiers seek higher-quality office spaces.
Notably, Sydney and Melbourne CBDs have seen increased relocation opportunities, boosting Q2 leasing activity by 10% compared to the previous year.
Looking ahead, the limited supply will impact the recovery of office markets beyond 2024.
From 2025, new supply is expected to be scarce, with only 254,200 sqm of additions forecasted, 60% below the 10-year annual average.
High construction costs and challenging pre-commitment levels contribute to this scarcity.
This lack of new supply is anticipated to tighten vacancy conditions, particularly for prime-grade office spaces.
