The office market in Australia has been facing headwinds over the past few years, a situation that has also been occurring in many countries since the onset of the COVID-19 pandemic. Vacancy levels are at 30-year highs, sitting at 14.6 percent in July 2024, down slightly from 14.8 percent in February 2024, according to the Property Council of Australia.

The weaker demand for office space has largely been because of working from home, economic conditions and the emerging threat of artificial intelligence (AI) on the office market. While many still have concerns about these effects, the Australian market has also seen a certain degree of stabilisation as the market works through these headwinds. Once these issues are fully stabilised, and subject to supply/demand constraints, the office market is expected to regain its dominant position in the Australian market.

By examining the headwinds created by working from home, economic conditions and the effect of AI, we gain ins