The Outlook of the Australian Commercial Property Market Report is Segmented by Type (office, Retail, Industrial and Logistics, Hospitality, and Other Types) and by Key Cities (Sydney, Melbourne, Brisbane, Adelaide, Canberra, and Perth). The Report Offers Market Sizes and Forecasts in Value (USD) for all the Above Segments.

In December 2024, commercial property sale asking prices were forecasted to witness a decrease of around 0.86 percent. Within the given time period, the largest growth in commercial property asking prices was recorded in June 2021.

The need for office space in Australia’s expanding cities has drawn investors to commercial property, with many wanting to cash-in on strong capital growth rates in the office segment. In the first quarter of 2021, the office yield rate in the central business district of Perth, Australia was around 6.5 percent. This was the highest rate across all states in Australia and the second highest yield rate was in Perth, Australia.

What is office yield?

In terms of commercial property, the yield represents the expected return on investment on a property. For investors, this is an important value as it indicates future income on an investment. Yield can be based on a property’s market value, annual income, and running costs. Capital growth, however, is not included in the calculation. The office yield was the lowest in Sydney. The vacancy rate in the CBD office market was also the lowest in Sydney compared to other major Australian cities.

Growth in the office segment

In 2019, Australia showed strong growth as a destination market for cross-border commercial real estate investment inflows in Asia Pacific. In the same year, transaction volumes reached a high in the office segment, with this segment also accounting for the highest share of foreign investment in commercial property. In addition, megadeals (greater than 400 million Australian dollars) reached a peak, solidifying the importance of the office segment in the commercial real estate industry in the country.

Retail property operators have endured highly volatile trading conditions in the past five years. Online shopping’s immense popularity has constrained demand for traditional bricks-and-mortar locations. This reduced demand for physical shopping has presented an issue for retail property operators despite a boost in overall demand for retail trade. With lower in-person sales, some retailers have reduced their instore presence and opted for an increased digital presence. This strategy minimises rent costs for these companies and minimises wage costs, as they no longer need to keep as many retail assistants on the books. Retailers have also had to contend with increasing interest rates, putting pressure on households and resulting in reduced spending on non-essential retailing. However, relief may be on the horizon as business confidence and consumer sentiment are forecast to recover. Some models imply that the worst inflation rates are behind us and that a rate cut may occur in early 2025. In the past, sustained periods of low interest rates have supported the development and supply of retail properties for operators to purchase and lease. However, these periods of affordable loans have given way to increased rates, stifling investment and reducing the number of new properties available. Compared to an abnormally low base year of 2019-20, industry revenue is expected to grow at an annualised 4.7% through the end of 2024-25 and total $42.7 billion, down by an anticipated 0.3% on the previous year. Profit margins have also declined alongside revenue. In the coming years, online shopping will continue to take market share from physical locations, reducing revenue for the Retail Property Operators industry by a forecast annualised 1.1% for the five years through 2029-30, leaving revenue at an estimated $40.4 billion. Retail property managers will be able to mitigate some of the impacts of online shopping growth by focusing on tenants that can’t sell their products or services online, like gyms, beauty salons or wine bars.

Australian commercial real estate agencies have faced revenue challenges due to mortgage affordability and business confidence shifts. In 2020 and 2021, government stimulus measures and historically low interest rates improved mortgage affordability. This led to increased investments in sectors like industrial and logistics, boosting demand for agents. However, office property transactions declined because of pandemic restrictions. Since 2021, higher interest rates and less government support have decreased mortgage affordability and business confidence, leading companies to delay or reduce property investments. Additionally, the ongoing shift to remote work has increased office vacancies, reducing demand and pressuring agencies to accept lower profit margins. Overall, industry revenue has dropped at an annualised 2.5% over the past five years and is expected to total $1.10 billion in 2024-25, when revenue will drop by an estimated 4.6%. The Australian commercial real estate industry is undergoing significant transformations due to market dynamics and increased consolidation among major firms. Companies like CBRE, JLL and Colliers International are expanding aggressively through acquisitions—enhancing their service offerings and solidifying market dominance. This consolidation intensifies competition and creates substantial barriers for smaller agencies, pressuring them to strengthen their brand presence or consider mergers to remain viable. Additionally, the ecommerce boom - accelerated by the COVID-19 pandemic - has sharply increased demand for industrial properties like warehouses near urban centres. This surge attracts investors seeking stable returns and escalates competition for limited industrial space. Despite a projected decline in the cash rate that is expected to boost spending and business confidence, Australia's commercial real estate sector is anticipated to face challenges from hybrid work models. Businesses likely to downsize or choose flexible leases will prompt agencies to offer flexible workspaces or repurpose properties. Meanwhile, ecommerce growth drives demand in the industrial property market, supporting industry revenue. Climate concerns and upcoming regulations are increasing demand for sustainable properties; the scarcity of net-zero energy offices allows agencies to market them at premium prices to ESG-focused tenants. This combination of factors is set to culminate in annualised growth of 1.5% over the five years through 2029-30 to $1.19 billion.

In December 2024, retail property rent asking prices were forecasted to increase by around 1.87 percent. The Commercial Property Asking Price Index tracks the monthly change in vendor sentiment towards commercial rental properties advertised in Australia.

Australia real estate market size reached US$ 130 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 176 Billion by 2032, exhibiting a growth rate (CAGR) of 3.4% during 2024-2032. The market is mainly driven by the rising population growth, economic stability and low interest rates on property purchase. Sustainable buildings, mixed-use developments and increased preference for online site visits and virtual tours are further contributing to the market growth.

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2024-2032. Our report has categorized the market based on property, business, and mode.

In December 2024, commercial property rent asking prices were forecasted to increase by around 2.21 percent. Within the given time period, the largest growth in commercial property rent prices was recorded in July 2022, with an increase of around 3.25 percent.

The office property sector has faced considerable headwinds from recent economic disruptions, including the lingering effects of the COVID-19 pandemic and a series of interest rate hikes. These dynamics and the rapid shift to remote and hybrid work models have diminished demand for traditional office spaces. Nonetheless, premium and A-grade offices in key CBD locations continue to attract stable, high-quality tenants, even as tighter Foreign Investment Review Board (FIRB) regulations have curbed foreign investment and spurred a turn towards domestic capital. Overall, industry revenue is anticipated to have fallen at an annualised 4.3% over the past five years and is expected to total $32.7 billion in 2024-25, when revenue will drop by an estimated 4.5%. Rising financing and maintenance costs have squeezed operating margins alongside evolving tenant demands. From 2020 to 2023, the sector experienced declining rental yields and prolonged lease renegotiations as businesses sought more flexible workspace arrangements. Operators have increasingly turned to technology-driven solutions and outsourcing to reduce wage expenses, yet the burden of capital expenditure and higher borrowing costs remains significant. Despite efforts to streamline operations through advanced property management systems, these cumulative cost pressures continue to erode profitability, leaving operators cautious about committing to new developments in an uncertain economic environment. Looking ahead, Australia’s recovering economy offers both promise and hurdles for office property operators. A revival in business confidence and gradually easing monetary policy are forecast to drive domestic investment, although the rise of flexible workspaces will continue to challenge traditional leasing models. Developers are responding by upgrading premium assets with modern amenities targeted at evolving tenant needs. Moreover, policy adjustments from the FIRB are set to reawaken interest from foreign and institutional investors, prompting a greater flow of capital into the industry. This combination of factors is set to culminate in annualised revenue growth of 3.3% over the five years through 2029-30 to $38.4 billion.

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Real Estate Market Size 2025-2029

The real estate market size is forecast to increase by USD 1,258.6 billion at a CAGR of 5.6% between 2024 and 2029.

The market is experiencing significant shifts and innovations, with both residential and commercial sectors adapting to new trends and challenges. In the commercial realm, e-commerce growth is driving the demand for logistics and distribution centers, while virtual reality technology is revolutionizing property viewings. Europe's commercial real estate sector is witnessing a rise in smart city development, incorporating LED lighting and data centers to enhance sustainability and efficiency. In the residential sector, wellness real estate is gaining popularity, focusing on health and well-being. Real estate software and advertising services are essential tools for asset management, streamlining operations, and reaching potential buyers. Regulatory uncertainty remains a challenge, but innovation in construction technologies, such as generators and renewable energy solutions, is helping mitigate risks.

What will be the Size of the Real Estate Market During the Forecast Period?

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The market continues to exhibit strong activity, driven by rising population growth and increasing demand for personal household space. Both residential and commercial sectors have experienced a rebound in home sales and leasing activity. The trend towards live-streaming rooms and remote work has further fueled demand for housing and commercial real estate. Economic conditions and local market dynamics influence the direction of the market, with interest rates playing a significant role in investment decisions. Fully furnished, semi-furnished, and unfurnished properties, as well as rental properties, remain popular options for buyers and tenants. Offline transactions continue to dominate, but online transactions are gaining traction.
The market encompasses a diverse range of assets, including land, improvements, buildings, fixtures, roads, structures, utility systems, and undeveloped property. Vacant land and undeveloped property present opportunities for investors, while the construction and development of new housing and commercial projects contribute to the market's overall growth.

How is this Real Estate Industry segmented and which is the largest segment?

The industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Residential
  Commercial
  Industrial


Business Segment

  Rental
  Sales


Manufacturing Type

  New construction
  Renovation and redevelopment
  Land development


Geography

  APAC

    China
    India
    Japan
    South Korea


  North America

    Canada
    US


  Europe

    Germany
    UK


  South America

    Brazil


  Middle East and Africa

By Type Insights

The residential segment is estimated to witness significant growth during the forecast period.

The market encompasses the buying and selling of properties designed for dwelling purposes, including buildings, single-family homes, apartments, townhouses, and more. Factors fueling growth in this sector include the increasing homeownership rate among millennials and urbanization trends. The Asia Pacific region, specifically China, dominates the market due to escalating homeownership rates. In India, the demand for affordable housing is a major driver, with initiatives like Pradhan Mantri Awas Yojana (PMAY) spurring the development of affordable housing projects catering to the needs of lower and middle-income groups. The commercial real estate segment, consisting of office buildings, shopping malls, hotels, and other commercial properties, is also experiencing growth.

Furthermore, economic and local market conditions, interest rates, and investment opportunities in fully furnished, semi-furnished, unfurnished properties, and rental properties influence the market dynamics. Technological integration, infrastructure development, and construction projects further shape the real estate landscape. Key sectors like transportation, logistics, agriculture, and the e-commerce sector also impact the market.

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The Residential segment was valued at USD 1440.30 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

APAC is estimated to contribute 64% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The Asia Pacific region holds the largest share of The market, dr

According to a survey conducted in the third quarter of 2024 about commercial property in Australia, the respondents anticipated the industrial property rents to rise by 2.2 percent across Australia in the next twelve months. An increase of 3.8 percent was expected in Queensland.

Australia Commercial Property Lending: ADIs: Actual: Other Residential data was reported at 51,102.900 AUD mn in Sep 2024. This records an increase from the previous number of 47,842.700 AUD mn for Jun 2024. Australia Commercial Property Lending: ADIs: Actual: Other Residential data is updated quarterly, averaging 33,926.350 AUD mn from Mar 2004 (Median) to Sep 2024, with 74 observations. The data reached an all-time high of 51,102.900 AUD mn in Sep 2024 and a record low of 17,229.500 AUD mn in Mar 2004. Australia Commercial Property Lending: ADIs: Actual: Other Residential data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.

According to a survey carried out in the third quarter of 2024 about commercial property in Australia, the respondents expected the industrial capital value in Queensland to increase by 3.8 percent in the next twelve months. All regions were expected to show an increase in the capital value of industrial property, aside from South Australia and the Northern Territory.

Australia Commercial Property Lending: ADIs: Actual: Tourism & Leisure data was reported at 14,238.400 AUD mn in Sep 2024. This records an increase from the previous number of 14,063.100 AUD mn for Jun 2024. Australia Commercial Property Lending: ADIs: Actual: Tourism & Leisure data is updated quarterly, averaging 9,142.050 AUD mn from Mar 2004 (Median) to Sep 2024, with 74 observations. The data reached an all-time high of 14,238.400 AUD mn in Sep 2024 and a record low of 4,467.300 AUD mn in Mar 2004. Australia Commercial Property Lending: ADIs: Actual: Tourism & Leisure data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.

Australia Commercial Property Lending: ADIs: Actual: Office data was reported at 118,017.100 AUD mn in Sep 2024. This records an increase from the previous number of 115,384.500 AUD mn for Jun 2024. Australia Commercial Property Lending: ADIs: Actual: Office data is updated quarterly, averaging 70,987.850 AUD mn from Mar 2004 (Median) to Sep 2024, with 74 observations. The data reached an all-time high of 118,017.100 AUD mn in Sep 2024 and a record low of 26,769.800 AUD mn in Mar 2004. Australia Commercial Property Lending: ADIs: Actual: Office data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.

Australia Commercial Property Lending: ADIs: Limits: Industrial data was reported at 85,977.600 AUD mn in Sep 2024. This records an increase from the previous number of 82,054.700 AUD mn for Jun 2024. Australia Commercial Property Lending: ADIs: Limits: Industrial data is updated quarterly, averaging 32,622.150 AUD mn from Mar 2004 (Median) to Sep 2024, with 74 observations. The data reached an all-time high of 85,977.600 AUD mn in Sep 2024 and a record low of 10,682.300 AUD mn in Mar 2004. Australia Commercial Property Lending: ADIs: Limits: Industrial data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.

Commercial Property Lending: ADIs: Non Performing: ow in Australia data was reported at 3,349.400 AUD mn in Sep 2024. This records an increase from the previous number of 2,563.800 AUD mn for Jun 2024. Commercial Property Lending: ADIs: Non Performing: ow in Australia data is updated quarterly, averaging 1,948.300 AUD mn from Mar 2022 (Median) to Sep 2024, with 11 observations. The data reached an all-time high of 3,349.400 AUD mn in Sep 2024 and a record low of 1,527.300 AUD mn in Sep 2022. Commercial Property Lending: ADIs: Non Performing: ow in Australia data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.

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Wellness Real Estate Market Size 2025-2029

The wellness real estate market size is forecast to increase by USD 768.6 billion, at a CAGR of 20.2% between 2024 and 2029.

The rising demand for wellness real estate from the luxury residential sector is the key driver of the market. As affluent buyers seek healthier living environments, the increasing demand for regenerative living is emerging as a significant trend. This trend focuses on sustainable, restorative spaces that promote physical and mental well-being, incorporating elements like biophilic design, eco-friendly materials, and holistic amenities to enhance the quality of life for residents. Key factors contributing to this trend include the rising awareness of health and wellness, the desire for work-life balance, and the growing popularity of sustainable and eco-friendly practices.
However, the market faces stiff competition, with numerous players vying for market share. To stay competitive, industry players must focus on offering unique and innovative features that cater to the evolving needs and preferences of consumers. In summary, the market is poised for continued growth, fueled by the increasing demand for properties that prioritize mental health and well-being, while also facing competition from a crowded marketplace.

What will be the Size of the Wellness Real Estate Market During the Forecast Period?

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The wellness movement has significantly influenced residential real estate, leading to the emergence of wellness communities that prioritize environmental sustainability and health outcomes. These communities cater to various demographics, including affluent foreign tourists, senior corporates, and urban youths, in metros and non-metros alike. The focus on personal investment in wellness and expenditure on healthier lifestyles has fueled the demand for properties that offer access to outdoor yoga studios, medicinal gardens, meditation courtyards, and eco-friendly homes. The culinary movement and design-driven movement have also played a role in this trend, with an increasing preference for properties that prioritize healthy eating and aesthetics. 
The green building movement is another significant factor driving the growth of the market. Buildings that prioritize safety, sanitation, and energy efficiency are in high demand. The importance of building safety, especially in the aftermath of natural disasters and pandemics, has become increasingly apparent. Traditional boundaries between urban and rural areas have blurred, with scenic hill stations, picturesque foothills, and lush green valleys becoming popular destinations for those seeking a healthier lifestyle.
Secluded sea beaches offer a similar appeal, providing residents with a tranquil environment conducive to relaxation and rejuvenation. The luxury sector has also embraced the wellness movement, with high-end developments offering top-notch healthcare services, ensuring the safety and well-being of residents. Urbanism, too, is evolving to accommodate the needs of health-conscious individuals, with a focus on creating sustainable, walkable communities that prioritize green spaces and public health. In conclusion, the wellness movement has transformed the residential real estate market, with a growing demand for properties that prioritize health outcomes, environmental sustainability, and personal well-being. This trend is expected to continue, with various demographics seeking properties that cater to their unique needs and preferences.

How is the Wellness Real Estate Market Segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

End-user

  Commercial
  Residential


Wellness Features

  Physical wellness
  Mental and emotional wellness
  Nutritional wellness
  Spiritual wellness
  Environmental wellness


Geography

  North America

    Canada
    US


  APAC

    China
    India
    Japan
    South Korea


  Europe

    Germany
    UK
    France


  Middle East and Africa



  South America

By End-user Insights

The commercial segment is estimated to witness significant growth during the forecast period. The market in the commercial sector is experiencing notable expansion, driven by an increasing number of wellness commercial pipeline projects and the development of wellness communities. This growth is evident in various sectors, including commercial real estate, offices and workplaces, public buildings, hospitality developments, and medical facilities. Factors contributing to this trend include the rise in energy-efficient technologies and regulatory mandates promoting renovation and modernization activities. Wellness communities, which pri

The Market for Modular Construction in Australia Report is Segmented by Material Type (Concrete, Glass, Metal, Timber, and Other Material Types) and Application (Residential, Commercial, and Other Applications (Infrastructure and Industrial)). The Report Offers Market Sizes and Forecasts in Value Terms (USD) for all the Above Segments.

Australia Commercial Property Lending: ADIs: Actual: Retail data was reported at 108,178.600 AUD mn in Sep 2024. This records an increase from the previous number of 102,915.700 AUD mn for Jun 2024. Australia Commercial Property Lending: ADIs: Actual: Retail data is updated quarterly, averaging 54,288.900 AUD mn from Mar 2004 (Median) to Sep 2024, with 74 observations. The data reached an all-time high of 108,178.600 AUD mn in Sep 2024 and a record low of 19,476.800 AUD mn in Mar 2004. Australia Commercial Property Lending: ADIs: Actual: Retail data remains active status in CEIC and is reported by Australian Prudential Regulation Authority. The data is categorized under Global Database’s Australia – Table AU.KB026: Commercial Property Lending.