Property Forecasting > Report

Canberra Commercial Property Prospects 2019-2029

Canberra's office market continues to recover, albeit at a modest pace. Faster progress is being held back by lacklustre growth in the Commonwealth workforce. Nonetheless, positive net absorption and further stock withdrawals will see a decline in the metropolitan-wide vacancy rate in H2, offsetting the impact of the first new office building in Civic in seven years.

Meanwhile, modest A grade rental growth and elevated leasing incentives reflect strong competition for tenants amongst owners and developers. By contrast, the investment market remains buoyant, with further price rises and yield contraction. We expect rental growth to remain subdued, reflecting both the quantum of new construction and the Commonwealth's efficiency measures (which will constrain net absorption). However, the short to medium term outlook for the investment market remains positive.

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