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Brisbane has emerged as Australia’s commercial property capital for 2025, amid a “year of mildly softening activity” revealed by new analysis from ANZ.
The major bank pointed to strong population growth in Queensland as a key driver of positive outcomes, including firmer values, rental growth and lower vacancies.
ANZ also noted that office vacancy rates in Brisbane’s CBD were among the lowest in the country, supported by limited new supply.
Stronger consumption trends compared to other states also helped keep retail vacancies comparatively low, according to the bank.
ANZ economists Adelaide Timbrell and Sophie Angala said Brisbane stood out as a bright spot.
“Queensland has had the strongest interstate migration of all states/territories since Q2 2017 and has also seen the second-fastest increase in population from Q1 2020, up 14 per cent compared to 11 per cent nationwide,” they said.
“Strong population and employment growth have been key drivers of strength in Queensland’s commercial property building approvals through 2023 and H1 2024.
“Brisbane’s CBD office vacancy rate has been lower than most other capital cities since late 2022 and is lower than pre-pandemic levels, bucking the trend of most capital cities.”
While Brisbane’s commercial property market performed strongly, Timbrell and Angala noted that activity Australia-wide softened in 2025, with approvals remaining below their 2022 peak and the value of work done lower than the 2024 high.
Across asset types, the retail sector stood out in the level of building work done and approvals, making it the only nationwide segment to surpass 2024 levels.
“Retail vacancies have largely normalised. Regional centres lead with the lowest vacancy rates. Retail building activity is growing despite modest consumption growth, perhaps driven by the prospect of future consumption growth from recent population increases,” they said.
ANZ also observed green shoots in industrial property and the office sector.
“Industrial property is the standout performer, with values and approvals surging; though rent growth is starting to ease as supply catches up,” they added.
“The office sector is showing signs of stabilisation. Return-to-office trends support premium office demand, but momentum has softened recently.”
Broker opportunity
Brokers are increasingly exploring opportunities in commercial property.
The number of mortgage brokers who were also writing commercial loans reached an all-time high of 7,023 between April and September 2024, according to the latest Industry Intelligence Service report from the Mortgage and Finance Association of Australia (MFAA), representing a 24.2 per cent year-on-year increase.
Speaking to Broker Daily, Matthew Chik from MC Finance Group said the outlook for 2026 hinges on several factors.
“Overall, I expect 2026 to broadly mirror 2025, with continued investor preference for defensive, well-leased assets and cautious capital deployment,” he said.
“Unless there is a material shift in policy or rates, stability and income security will remain the dominant themes across the commercial property market.”
Son Pham from Rethink Financing said the outlook was positive with some headwinds.
“Interest rates and inflation remain a focus. However, demand continues to be strong. With increased lender competition plus improving conditions and yields stabilising, we expect a lift in transaction activity and renewed confidence across the market,” he said.
“Assets with quality covenants and strong underlying land value should continue to outperform, while secondary stock may face more scrutiny.
“Overall, we anticipate a more active, opportunity-led environment as investors re-enter the market with clearer forward visibility.”
[Related: Resi, commercial, & FHB: Next market shifts explained]