Australian office market to see sustained vacancy recovery

Thanks to the diminishing supply pipeline.

The Australian office market showed strong signs of recovery in the first half of 2025, driven by a diminishing supply pipeline and robust leasing activity.

According to the latest market insights report by Colliers, the sustained recovery in vacancy rates is being underpinned by a decline in new developments.

Here’s more from Colliers:

The CBD office development pipeline continues to decline, with annual gross additions by year-end expected to be 35% below the 10-year average. 

With no replenishment from new supply, leasing activity is now more centered around A-grade and B-grade stock. 

Effective rents are broadly recovering across CBD markets with Sydney Core (+4.2% YoY) and Brisbane (+15.6% YoY) the standout performers.