The Australian cities where working from home is still out of favour
Companies are leasing premium office space to entice workers back, but employees in one major capital are holding out
2 min
The post-COVID return to CBD offices continues across Australia, with the average office occupancy rate climbing to 76 percent of pre-pandemic levels in the first quarter of 2024, according to new CBRE figures. Workers are gradually responding to their employers’ requests to attend their offices more regularly to enable greater collaboration with workmates. The occupancy rate has risen from 70 percent in the December quarter and 67 percent 12 months ago.
Occupancy rates improved across all capital cities during the March quarter, with Perth and Adelaide maintaining the strongest rates of 93 percent and 88 percent respectively. CBRE analysis suggests shorter commuting times and less structured working-from-home arrangements in these cities have contributed to higher rates of return. Brisbane’s occupancy rate is 86 percent of pre-COVID levels, weighed down by a slower return within the public sector, which represents 35 percent of the city’s office space. This same trend is being seen in Canberra, where the occupancy rate is just 66 percent.
In Sydney, the occupancy rate has risen to 77 percent, largely due to major banks and professional services firms pushing for more staff to return to the office this year. There has been a significant increase in workers returning to offices in Melbourne, with the occupancy rate up from 57 percent last quarter to 62 percent now. However, this is still the lowest attendance rate in the capital cities.
Businesses are increasingly pushing workers to return to the office because they are concerned working from home over multiple years will have a negative long-term impact on company-wide productivity. Part of the problem is new employees not having regular access to senior staff so they can learn and work more effectively and productively. CBRE says lower levels of collaboration and interaction reduce innovation, which is a particular concern for technology firms. They were quick to embrace remote working during COVID, but are now seeing dampened creativity among staff.
Tuesday is the peak day for attendance at CBD offices and Friday is the lowest day. Two-thirds of organisations that have moved their corporate headquarters since COVID have chosen to upgrade to premium office buildings, according to CBRE’s research. Premium blocks typically feature retail, restaurants, and recreational amenities on the ground floor, and command a higher rent. Companies are deciding it’s worth the cost to entice workers backand keep them feeling happy and engaged.
Jenny Liu, Director of Workplace Consulting at CBRE, said a vibrant workplace experience is essential.
“A workplace experience isn’t just environment, cool furniture and tech anymore,” she said. “It’s the culture, ways of working, leadership, and how vibrancy is created.”
Some companies are using apps that inform staff who will be in the office tomorrow. CBRE Research Manager Thomas Biglands said:
“It’s important that you achieve a critical mass of visitation so that employees come in and feel as though the office is vibrant and full,” he said.
Some firms are linking salary and promotions to office attendance to reward those workers providing higher contributions to corporate culture and mentoring younger staff.
The rate of return to offices in Australia is much higher than in the United States, where occupancy rates have remained at about 50 percent over the past year. CBRE analysis suggests this may be due to better public transport, shorter commutes and lower inner-city crime rates in Australia.
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Australia’s housing affordability crisis is being fuelled by chronic undersupply, planning delays and rising development costs, as politicians continue to focus on the wrong solutions.
3 min
Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.
Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.
Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.
“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.
“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”
Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.
Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.
“In the absence of stock, demand exceeds supply,” he said.
Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.
He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.
“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.
“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”
Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.
He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.
McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.
While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.
“People are looking for value for money,” she said.
She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.
“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.
The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.
“The viability of a development happens at the moment the site is bought,” he said.
He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.
While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.
“It is actually a business that requires a level of expertise,” he said.
Looking ahead, the panel agreed opportunities remained in the market despite current challenges.
Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.
McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.
Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.
“We can provide affordable housing in this country,” he said.
“But we’ve got to wrap that affordable housing with the things that people want.”
As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.
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