Real Estate Returns Rebound as Investors Shift from Caution to Confidence
Dexus Research sees renewed momentum across office, retail and industrial sectors as market sentiment improves.
2 min
Australian real estate is showing signs of a comeback, with new data revealing accelerating returns across all major property sectors and improving investor confidence.
The latest Q3 2025 Australian Real Asset Review from Dexus Research highlights a positive shift in momentum, driven by falling interest rates, stabilising vacancy rates and renewed business sentiment.
The report suggests that the market may be transitioning from a period of “Fear of Acting Too Early (FATE)” to “Fear of Missing Out (FOMO)” as capital begins to flow back into real assets.
Unlisted property funds are leading the resurgence, posting their strongest returns in two years in June 2025, particularly in retail and industrial.
Dexus forecasts sector-wide returns exceeding 7% per annum within the next 12 months, buoyed by positive revaluations and rising deal activity.
In the office sector, the Sydney CBD appears to be entering a classic recovery cycle.
For high-quality assets, capitalisation rates are believed to have peaked, vacancy rates are levelling off, and rental growth is back on the rise. With demand strengthening and limited new supply, Dexus says this could mark a rare window of opportunity for investors.
Retail property is also showing signs of renewed strength, helped by real wage growth and declining mortgage rates. CBD vacancy rates have dropped and rents are firming, especially in regional shopping centres.
Meanwhile, infrastructure transaction volumes rose significantly in Q2 2025, with renewed focus on renewable energy and battery storage projects.
Government spending is playing a major role, with the Federal Government’s $60 billion infrastructure pipeline and various state initiatives expected to drive new project originations into 2026.
Overall business confidence is improving, even amid a sluggish broader economy. Falling inflation, political stability, and a rising equities market are contributing to stronger leasing expectations in the second half of the year.
“Global uncertainty continues to influence sentiment in capital and occupier real asset markets,” said Peter Studley, Dexus Head of Research.
“However, with interest rates falling and supply constrained, there are compelling reasons to expect stronger real estate returns in the months ahead. The big question is, how quickly will the tide turn from Fear of Acting Too Early (FATE) to Fear of Missing Out (FOMO) for real asset investors?”
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The megamansion was built for Tony Pritzker, heir to the Hyatt Hotel fortune and brother of Illinois Gov. JB Pritzker.
The megamansion was built for Tony Pritzker, heir to the Hyatt Hotel fortune and brother of Illinois Gov. JB Pritzker.
2 minOne of the priciest homes for sale in the Los Angeles area just got $40 million knocked off its listing price.
The Beverly Hills megamansion is now listed for $135 million, the highest asking price on the open market in Los Angeles County.
One other property , in Bel-Air, is also asking $135 million after a similar-sized price cut last month.
“It’s time (for the sellers) to move to the next chapter…They’re ready to pass the torch,” said Kurt Rappaport of Westside Estate Agency, who shares the listing with his colleague Stephen Shapiro.
The home was built for Tony Pritzker—heir to the Hyatt Hotel fortune and brother of Illinois Gov. JB Pritzker—and Jeanne Pritzker, who listed the home for sale in October 2024 for $195 million after settling their divorce, The Wall Street Journal reported at the time. That price was lowered to $175 million in April.
The estate is made up of multiple parcels, and, under an LLC, they bought at least some underlying property in 2005 for about $14.7 million, according to records accessed via PropertyShark.
The Pritzkers hired architect Ed Tuttle to design their contemporary mansion, made of steel, glass and limestone and completed in 2011. At 50,000 square feet, it’s one of the largest homes in the U.S., and nearly as big as the White House.
It stands on a 6-acre promontory—an unusually large lot size for Beverly Hills—allowing for an unobstructed view that stretches across Los Angeles all the way to the ocean.
“It’s one of the best and largest view promontories in Los Angeles,” Rappaport said. “The architecture design and scale of the property are irreplaceable.”
The 16-bedroom, 27-bathroom home is filled with all the expected high-end amenities, including a theater, a game room, a bowling alley, a wellness centre, a gym and a wine cellar, according to the listing.
There’s also a security room, 18 fireplaces, solar panels, and a heating and cooling system powered by geothermal technology.
On the grounds, there’s a two-story, two-bedroom guest house; parking for up to 100 cars; a green marble infinity pool and hot tub; an outdoor kitchen; and a lighted tennis court with a pavilion, according to the listing.
The Pritzkers couldn’t be reached for comment.
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