Insights H1 2026 | 5 A growing preference for income stability Part of the appeal of commercial property has always been the stability of income it generates through long, and often costeffective lease arrangements. This is especially important at present because as the RBA observed in its February rate meeting, “Australian equity prices underperformed other markets over preceding months” . We continue to see commercial property deliver attractive yields coupled with solid cash flows, which continue to make this asset class attractive to investors. Low supply backed by high demand In recent years, the continuing growth in residential property prices has seen commercial property assets converted to residential housing. This, coupled with an already acute undersupply of land devoted to new industrial estates, is driving the price of industrial assets higher especially in areas close to CBDs, transport links and infrastructure hubs. There is little evidence that this will change any time soon. Household spending remains robust Despite a cost of living crunch, data from the Australian Bureau of Statistics indicates that household spending remains strong – rising 5.0% in 2025 relative to 2024. Backed by an unemployment rate of just 4.1% , this is a positive driver for commercial real estate with many businesses ultimately relying on consumer spending for revenue growth.
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