A growing number of Australians working from home has pushed office vacancy rates in major cities to a 30-year high, according to new data.
With around 30 percent of the workforce continuing to work remotely, more office buildings in central business districts (CBDs) remain empty. Vacancy rates in CBDs rose to 14.3 percent during the first half of 2025, the highest level since 1995, when Australia was still recovering from the property market crash of the 1990s.
Sydney saw its vacancy rate increase by nearly 1 percent due to an oversupply of office spaces compared to demand, as reported by the Property Council of Australia. Brisbane, Canberra, and Perth also experienced rises in vacancy rates, while Melbourne’s CBD saw a slight decline. Despite this, Melbourne holds the highest office vacancy rate nationwide at 17.9 percent.
While remote work is a major factor, demand for premium office spaces has also shaped the vacancy landscape. Mark Zorbas, CEO of the Property Council, explained that the continuous supply of new high-quality offices in CBDs reflects businesses’ desire to offer great workplaces for their employees. “Tenants are capitalising on opportunities to occupy premium buildings in prime CBD locations, with premium space continuing to see higher demand levels than lower-grade buildings,” he said.
The surge in supply is partly due to extensive development earlier this decade, with up to 2.6 million square meters of office space built over the last five years. Additionally, 200,000 square meters of office space was added in the past six months alone, contributing to the oversupply issue.
