Higher interest rates and inflation have weighed on Australian commercial real estate for the past two years. Beginning in May 2022, the Reserve Bank of Australia increased the cash rate on 14 separate occasions, with the majority, or 11, of those increases being undertaken in the initial 12-month period of May 2022 to May 2023. In the past 12 months, however, there has been an overall slowdown in the rate of increases as the RBA continues to monitor the effects of the increases in combination with a pullback of inflation. While the effects have increased uncertainty, the Australian property market has, to some extent, been able to smooth out the effects during the past two years.

Listed-market position

The listed Australian property sector delivered a strong performance in the first quarter of 2024, off the back of lower inflation numbers. Inflation, which peaked at more than 7 percent in late 2022, has now dipped below 4 percent. While this is still