Victoria’s commercial property market showed signs of renewed momentum in H1 2025, supported by multiple interest rate cuts. The healthcare and life sciences sector remained resilient, attracting institutional capital for well-located, secure assets. Melbourne’s industrial market stabilised with subdued rental growth due to increased supply, though investor interest returned in sub-$30m transactions.
The CBD office market saw marginal vacancy improvement, with strong interest in premium-grade buildings and higher sales volumes driven by private buyers. Residential development sentiment improved on the back of rate cuts, with fundamentals pointing to stronger activity in late 2025.
Retail investment saw increased capital flows from private, domestic, and offshore buyers, particularly in sub-$100m neighbourhood centres. Residential living sectors like build-to-rent gained traction, supported by structural housing demand. Finally, prime service station assets continued to perform, though regional assets saw limited demand.
Moving forward, yield stabilisation and further rate cuts are expected to support continued recovery across all sectors.
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