Australia’s office market is facing its highest national vacancy level in nearly three decades, with rates climbing to 15.2%. The rise is largely driven by an influx of new developments entering the market faster than businesses can occupy them.

According to the Property Council of Australia (PCA), the shift reflects a growing preference for high-quality work environments, as major CBD projects continue to reshape the commercial property landscape.

In the six months to July, CBD vacancies ticked up to 14.3%, while suburban markets remained stable at 17.3%. More than 200,000 square metres of new office supply was added nationwide during this period, well ahead of current tenant demand.

PCA Chief Executive Mike Zorbas described the ongoing construction wave as part of a broader “refresh” of Australia’s office stock.

“Businesses are looking for well-designed, high-quality workplaces,” he said. “That’s driving the steady pipeline of new premium-grade towers across our capital cities.”

This flight to quality has meant premium and A-grade offices remain in strong demand, while older B-, C-, and D-grade buildings continue to experience higher vacancies.

Melbourne and Perth Lead the Vacancy Rankings

Melbourne continues to hold the nation’s highest CBD vacancy rate at 17.9%, only a slight improvement from earlier in the year. Perth follows closely at 17%, while Sydney’s CBD rose marginally to 13.7%.

Outside central business districts, Crows Nest and St Leonard's in Sydney have seen vacancy rates approach 30%, highlighting the pressure on non-CBD locations.

Industry analysts warn that Victoria’s proposed legislation to enshrine two days of work-from-home rights could add further strain to Melbourne’s office recovery.

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At Mayfair Estate Agents, we believe Australia’s evolving office landscape reflects more than just statistics, it represents transformation, innovation, and renewed confidence in the future of work. As businesses continue to seek premium, purpose-built spaces, we remain dedicated to guiding our clients through this dynamic market with insight, expertise, and integrity.

Created by Mushi and the Mayfair Team

0416 890 664 | ✉️ mushi@mayfairestateagents.com.au