Australia’s commercial property market rebounded in 2025, with transactions reaching $85.58 billion across 9,015 sales – up 27% on 2024’s $67.40 billion. Rising average deal sizes point to larger, more strategic capital rather than opportunistic trades.
“The most significant market indicator sits in the average transaction size, which climbed to $9.49 million across all sectors, up 24.6% from $7.62 million in 2024," said Vanessa Rader (pictured), Ray White Group head or research. "This increase exceeds both inflation and cap rate compression, indicating genuine capital value appreciation.”
Queensland was the standout, with volumes up 61.1% to $21.35 billion and nearly a quarter of national activity.
“Queensland emerged as the clear winner, with transaction volumes growing 61.1% to $21.35 billion, capturing nearly 25% of national activity,” Rader said. Average deal size jumped 56.2% to $10.79 million.
Victoria fell 5.5% to $17.30 billion and its share of national activity dropped to 20.2% from 24.3% as investors favoured states with more competitive tax settings. WA rose 5.7% to $4.63 billion, South Australia 10.3% to $3.91 billion, the ACT posted modest gains, and Tasmania reached $593 million.
Industrial remained the most-traded sector at 31.1% of volumes, with transactions up 27.6% to $26.58 billion. Average deal size increased from $5.20 million to $6.05 million, supported by low vacancies, limited supply and e‑commerce demand.
Retail volumes climbed 43.8% to $18.90 billion and average deals rose 50.5% to $11.72 million, led by sub‑regional and neighbourhood centres, especially supermarket‑anchored assets in growth corridors and established suburbs.
Office deals totalled $16.17 billion, up 28.1% and 18.9% of volumes, with strong demand for premium CBD towers and weaker conditions in some suburban markets. Average office deal size rose to $11.19 million from $8.41 million. Hotel transactions hit $4.72 billion, up 42.5%, with average deals at $13.88 million as tourism and pub assets remained in favour.
Development site investment fell 18.5% to $10.16 billion, but average deal sizes climbed to $21.58 million, showing fewer, larger projects in a rate‑sensitive segment.
The “other” category – childcare, service stations, and aged care – jumped 80.5% to $9.04 billion as investors chased defensive income, including government‑backed childcare cashflows and long‑lease essential‑service assets.
Rader said 2025 marked a shift in behaviour.
“The 2025 transaction data suggests a market transitioning from opportunistic positioning toward strategic-based capital deployment,” she said, as institutional, private, and offshore capital paid up for quality assets.
Interest rates are seen as the key swing factor for 2026, with residential and commercial values expected to closely track rate moves. Globally, sentiment is also improving as investors anticipate a more supportive rate environment and capital begins to flow back into commercial real estate.
If rates ease as markets expect, Rader sees scope for a lift in development activity from subdued 2025 levels, while continued focus on existing stock would highlight replacement cost pressures and the scarcity value of well‑located, income‑producing assets.
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