For the first time since 2022, confidence in Melbourne's commercial property market has turned positive, according to NAB's latest commercial property survey.
But it's not just Melbourne. Optimism is spreading across Australia's commercial property market, with positive sentiment now reported in every sector and every state.
The turnaround in Melbourne is thanks to a strong lift in the city's office property sector, with retail also showing signs of improvement.
Confidence in Melbourne's office market jumped to +21 in the latest quarter, the first positive result since the start of the pandemic. This new optimism is being driven by fewer empty offices, hopes that property values will rise, and a generally brighter mood among developers and investors.
This means that for the first time since Covid, people are feeling confident about buying and renting office buildings in Melbourne.
NAB Group Executive Business & Private Banking Andrew Auerbach said the positive outlook meant less risk of falling values and more stability for long-term planning.
"With confidence returning to Melbourne's commercial property market, businesses are feeling more secure about leasing new office space, expanding operations, or even buying property," said Mr Auerbach.
"We're seeing renewed interest from both local and interstate investors, and this momentum is creating new opportunities for growth and innovation across the region."
NAB's Commercial Property Index is still close to its highest level in eight years, even though it dipped slightly this quarter (+20, down from +24).
"And the return of confidence in commercial property more generally is a positive signal for the broader economy. It suggests that businesses are feeling more optimistic, hiring staff, and planning for growth," said Mr Auerbach.
The report shows this ongoing recovery is thanks to a combination of strong results in the industrial and hotel sectors, improvements in office and retail (especially in Victoria), growing expectations that property values will rise, fewer empty properties, and easier access to finance for buyers and investors.
