Is the Australian office market recovering or in distress in 2026?
Both — and lumping them together is the mistake. The honest read is a widening split: prime, well-located, well-let buildings are stabilising, while secondary and tertiary stock keeps de-rating toward functional obsolescence. Headline CBD vacancy is still high (around 16%), but that average hides the divergence.
On our model office screens rich — some softening is already priced in, and the income yield carries most of the return from here. Crucially, new office supply approvals are steady — no fresh glut of quality space is coming — which supports the best buildings even while weak stock struggles. It's a stock-picker's market, not a whole-sector call.
Is now a good time to buy office property?
MPLC provides information and forecasts only, not advice. What the model can tell you: office isn't a uniform bargain or a uniform trap. The return case rests on income durability and asset quality — a well-let prime building on a repriced yield is a very different proposition from a half-empty secondary tower. We publish the fair-value yield and five-year range by city.
Why is prime office holding up while secondary falls?
A flight to quality: as firms use less space per head, they consolidate into fewer, better-located, higher-amenity buildings. That concentrates demand into prime and drains it from secondary. Layer on a thin new-supply pipeline for quality space, and the best buildings get a floor while the rest face conversion, redevelopment or obsolescence.