Growing take‑up is being outpaced by new supply
Australia’s central business district office markets have posted their strongest occupier demand since 2022, yet growing take‑up is still being outpaced by new supply and rising vacancy.
Over the 12 months to January 2026, national CBD net absorption reached 135,279 square metres, indicating that many occupiers are again expanding floorplates rather than consolidating space.
At the same time, 389,514 square metres of new CBD stock came to market, pushing aggregate vacancy to 14.8%, up from 14.3% six months earlier. For lenders and valuers, the figures point to a market where leasing conditions are improving, but a sizeable oversupply will take years to clear at current absorption rates.
“Queensland emerges as the standout state performer, with Brisbane CBD leading national results through exceptional annual absorption of 37,480 square metres,” said Vanessa Rader (pictured right), head of research at Ray White.
“This marks Brisbane's continuation as Australia's most consistent office market, demonstrating sustained business expansion and tenant demand that has persisted across multiple reporting periods.”
Queensland’s strength has been underpinned by the Gold Coast and Sunshine Coast, with the latter absorbing 11,844 square metres despite its smaller base. Population growth, business formation and interstate corporate relocations continue to translate into new office requirements, supporting income stability in key assets and underpinning loan serviceability metrics in that state.
New South Wales also recorded solid gains. Sydney CBD posted annual net absorption of 21,657 square metres, with prime towers drawing back existing tenants and attracting new entrants. Parramatta added 4,062 square metres of demand, suggesting ongoing resilience in Western Sydney despite higher vacancy, while Newcastle absorbed 4,836 square metres amid the Hunter region’s economic diversification.
In Victoria, Melbourne CBD has shifted back into positive territory, with annual absorption of 29,475 square metres after several years of net give‑back. However, the state’s non‑CBD markets remain under pressure. St Kilda Road recorded negative absorption of 48,711 square metres, reflecting a continued “flight to quality” that favours newer or better‑located offices and leaves secondary properties exposed to refinancing and valuation risk.
Western Australia’s capital has shown gradual improvement. Perth CBD absorbed 6,429 square metres over the year, and has now posted positive absorption across multiple periods despite comparatively high vacancy.
South Australia stands out for the scale of its recovery relative to market size. Adelaide CBD absorbed 33,023 square metres in the year and reduced vacancy to 15.5%. The Adelaide Fringe added a further 4,649 square metres of demand.
Canberra continues to rank among the country’s more stable office markets. The national capital recorded annual absorption of 16,923 square metres despite significant new completions.
“Over the last 12 months Sydney CBD faced 84,553 square metres of supply additions pushing vacancy to 13.8%, Brisbane CBD’s 85,971 square metres of new stock driving vacancy to 11.8%, and Melbourne CBD managed 100,118 square metres of completions keeping vacancy at 19%,” Rader said.
“These supply additions represent development decisions made years ago, with projects now completing into a market where tenant demand has returned but remains insufficient to materially reduce vacancy in the near term.”
Even Brisbane, the best‑performing of the major CBDs, remains almost 200 basis points above its pre‑pandemic vacancy level, underscoring how far conditions still sit from historical norms.
Nationally, the numbers point to a slow road back to tighter markets. With total CBD vacancy estimated at about 4.36 million square metres and annual absorption running below 50,000 square metres, a meaningful reduction in empty space would require either a sharp lift in tenant demand or notable stock withdrawal.
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