The Perth commercial property market is entering 2026 with a confidence it has not seen in years. After a prolonged period of cautious sentiment, rising vacancy and subdued investment activity, improving economic fundamentals, tightening supply and returning investor appetite are reshaping the landscape for businesses and landlords alike.
This post covers the key trends defining the Perth commercial property market in 2026, what the data says about where things are headed and what it all means for businesses searching for office space in the city.
A market in recovery: the big picture
Australia’s commercial property sector broadly returned to positive territory in 2025, with all three core asset classes, office, retail and industrial, delivering positive total returns in the same quarter for the first time since mid-2023. According to KPMG’s December 2025 Commercial Property Market Update, the national office sector recorded total returns of 4.4% in the September quarter 2025, a clear break from the sustained negative growth since June 2023.
For Western Australia specifically, the mood is decidedly upbeat. Ray White head of research Vanessa Rader, described WA as “one of the most interesting markets to watch”, noting that capital volumes have started rising again and that the state’s strong economy, tight supply conditions and active private and institutional capital are all supporting that momentum, as reported in an interview with Australian Broker in December 2025.
Underpinning all of this is a resilient economic backdrop. KPMG forecasts real GDP growth of 2.1% through 2026 and 2027, with population growth remaining well above budget forecasts at 1.6%, driven by strong net overseas migration. Real wages growth has finally caught up to the cost of living, supporting household spending and, in turn, business confidence.
The Perth office market: from laggard to opportunity
Perhaps the most significant shift in Perth commercial property market trends heading into 2026 is the recasting of the office sector as a genuine opportunity play.
The office vacancy rate nationally sits at 14.4% and is forecast to trend downward as tenant demand recovers and limited new supply restricts additions to stock, according to KPMG. Within Perth, that story is becoming even more compelling. RWC WA head of capital transactions Brett Wilkins told Australian Broker that offices are “the great countercyclical play”, with institutional funds offloading CBD assets and opening the door for opportunistic tenants and buyers alike.
A meaningful floor is also forming under rents. Wilkins noted that economic rents required for any new office development are approaching $1,000 per square metre, meaning office rents in Perth have essentially one direction to go. Both Rader and Wilkins expect a genuine CBD revival, with Rader specifically advising: “For 2026, keep an eye on the Perth office market.”
International interest is also building. Buyers, particularly from Singapore, are actively seeking exposure to the Perth market and timing their entry, signalling growing external confidence in the city’s commercial fundamentals.
Supply constraints are keeping quality stock scarce
One of the defining features of the current market is how little new quality supply is coming through. KPMG reports that non-residential construction starts reached $75.9 billion in FY25, up 13% on the prior year, but construction costs remain elevated and are showing signs of renewed upward pressure, with output prices rising 3.8% through the year, driven by skills shortages and enterprise agreement wage rises.
Wilkins confirmed that construction capacity and costs remain the primary handbrake on new office, industrial and residential supply in WA. Any projects that do proceed are likely to be highly pre-leased and carefully underwritten. For businesses in the market for office space, this means that well-located, existing-quality buildings are increasingly rare and increasingly valuable.
ESG is no longer optional
Sustainability credentials are rapidly becoming a non-negotiable filter across the Perth commercial property market. Rader was direct on this point: “Environmental and sustainability issues are not going away. Brands are much more conscious about this.” KPMG echoes the sentiment, noting that ESG (Environment, Social and Governance) credentials and sustainability considerations now influence both leasing and investment decisions across all asset classes.
According to KPMG, ESG performance is increasingly sharpening the divide between premium, highly rated assets and secondary stock at risk of obsolescence. For tenants, this means choosing a building with credible sustainability credentials is not just an ethical consideration but a practical one, directly affecting brand perception, staff attraction and retention and long-term cost efficiency.
What businesses should be thinking about for 2026
The data paints a consistent picture. Perth office vacancy rates are trending down. Rents have a floor and are rising. Quality supply is constrained. International capital is returning. ESG is reshaping which buildings attract tenants and which do not.
For businesses currently reviewing their office requirements, 2026 is the year to move with purpose rather than wait. Wilkins summarised the broader market sentiment well: “2026 will be a year of good activity. Due diligence periods will be longer, but that’s not necessarily a bad thing, it’s more considered.” Waiting too long risks finding fewer options at higher rents, particularly for businesses that need larger or customisable floorplates.
Explore what 18 Terrace Road has to offer
For businesses that want to take advantage of this market shift without committing to the full cost and complexity of a CBD address, 18 Terrace Road in East Perth is worth a closer look. Sitting just 12 minutes from Perth’s CBD by free bus and directly opposite Langley Park, the precinct offers up to 5,465 sqm of flexible, customisable office space across three levels.
With 435 covered car bays, on-site retail, dining, a hotel, a supermarket, a medical centre and a 24-hour gym, alongside a 3.5 Star NABERS Energy Rating and a clear pathway to 5.5 stars, 18 Terrace Road is the prime commercial property for lease in Perth, built to support high-performing teams without the premium price tag of the CBD.
Browse our current listings to view available spaces or take a virtual tour to get a feel for the location. Ready to discuss your requirements? Get in touch with our team to start the conversation.
