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Melbourne Commercial Property Prospects 2019-2029

Latest data updates for Melbourne office market indicators confirm continued strength in both leasing and investment markets, albeit net absorption is now constrained by a lack of suitable vacant space. As the wave of supply under construction comes on stream over the next couple of years, we expect pent-up demand to be released. The resulting strong net absorption should keep vacancy rates in check. In turn, further strong gains in rents are expected (little changed from earlier forecasts). In the investment market, further near term firming of yields is on the cards and the benign 10-year bond rate outlook suggests that, when a softening of yields does occur, it will be moderate. All in all, solid returns are forecast to a market peak around 2024.

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