The supply picture
New office supply in Melbourne is easing (-11% year-on-year) — the pipeline is thinning, which is supportive for existing assets over time.
Precinct by precinct
Across 247 Melbourne office precincts, the current tilt is 80 tightening · 46 demand-led · 94 quiet · 27 oversupply risk (median supply change -51% year-on-year). This is a stock-picker's market: the pressure is uneven, not uniform.
Tightening / demand-led: East Melbourne, South Melbourne, Southbank (West) - South Wharf, South Yarra - South
Watch (oversupply risk): Mulgrave, Mill Park - North, Craigieburn - West, Cranbourne West
The sector backdrop
Valuations lag rates — capital softening still to come; income cushions it. Office cap rates sit around 6.32% on our national read. Conditions are neutral / transitional on our macro read.
Cap rate = the yearly income as a share of price (a higher number is cheaper). The number above is a market read; where our model puts fair value, and the five-year return forecast, are in the report.
The full Melbourne office read
Fair-value cap rate, the five-year total-return forecast and the downside range — plus the precinct data in full — sit in the Melbourne Office report, refreshed every edition.
See the report →Source: ABS building approvals (supply), MPLC precinct model to SA2 (demand tilt), RBA (rates, yields) and the MPLC valuation model. As at September 2026. Information & forecasts only — not advice.