As 2025 closes, confidence is returning across Australia’s property markets. Colliers’ sector leaders share their perspectives on the year that was and what lies ahead.
Capital Markets: Sydney sets the benchmark
Matthew Meynell, Managing Director, Office Capital Markets & Investment Services notes that transaction activity in 2024 and 2025 was heavily concentrated in Sydney’s CBD, establishing national pricing benchmarks. Institutional capital remained dominant, targeting prime CBD opportunities amid scarcity of high-quality stock. Syndicates also gained traction in metro and fringe markets as recovery momentum built.
Looking ahead, Meynell expects demand for premium commercial assets to remain strong. “As the office market stabilises, domestic buyers are likely to increase their share of transactions after being net sellers for the past 24–36 months.”
Industrial & Logistics: Strength and momentum
Gavin Bishop, Managing Director, Industrial & Logistics highlights a strong year for industrial and logistics sector with investment volumes reaching $6.7 billion and sitting well above long-term averages. Queensland led the charge, supported by infrastructure activity and strong rental growth. Alternative assets such as data centres and cold storage attracted growing interest while vacancy rates held tight at 3-4% due to structural undersupply.
“Looking to 2026, liquidity and transaction volumes are expected to lift, offshore capital will remain active and lower interest rates should reinforce pricing stability. We anticipate some yield compression and the early stages of a new development cycle.”
Retail: Resilience underpins confidence
Retail capital markets saw a resurgence in liquidity for quality assets in 2025, underscoring the sector’s resilience. Lachlan MacGillivray, Managing Director, Asia Pacific Retail Capital Markets expects this momentum to continue. “Premiums above current book values likely on key transactions. Chronic undersupply of retail floorspace and robust retail sales performance will continue to underpin investor confidence and drive competitive bidding.”
Residential: Opportunity amid constraints
Diana Sarcasmo, Managing Director, Residential observes strengthening conditions across most capitals with Brisbane overtaking Melbourne as Australia’s second most expensive city. Colliers’ national enquiries rose 20% year-on-year and demand for smaller apartments dominated amid affordability pressures.
“2026 will be shaped by affordability challenges and supply constraints but also opportunity. Melbourne and Canberra are entering recovery, Brisbane’s growth story continues and Sydney’s apartment market particularly one- and two-bedroom options will outperform. With rental pressures persisting, we expect more Australians to embrace ‘rent-vesting’ as a strategy to balance lifestyle and investment goals.”
Office Leasing: Amenity and value drive decisions
Cameron Williams, Managing Director, Office Leasing observes a clear shift toward refurbished and renewed fitouts in 2025, as tenants sought cost-effective solutions amid rising fitout expenses. Spec suites lost momentum while centralisation benefited Sydney’s western corridor.
“In 2026, tightening conditions in core premium markets will dominate. With minimal new supply on the horizon, effective rental growth is forecast to accelerate in the second half of the year, while incentives continue their downward trajectory.”
The Big Picture
Across all sectors, 2026 promises a landscape defined by stabilisation, strategic positioning and selective growth. Investors and occupiers alike will focus on fundamentals quality assets, strong covenants and locations offering connectivity and amenity as Australia’s property markets move confidently into the next cycle.
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