Australia's 5th interest rate cycle impacts yields & sales. Investors reassess pricing, but opportunities emerge. Stay updated for 2024 insights!
Insight
Impact of the 5th cash rate cycle on Australian office sector
Authors
CH
Christopher Hall
| Interest rate hike cycle | Movement in interest rates | Movement in Australian CBD office prime midpoint yield | Movement in Australian CBD office secondary midpoint yield | Sales Transactions across Australian CBD market (AUD) |
| Q2 1994 to Q4 1994 | 4.75% to 7.50% (+275 bps) | 7.96% to 7.65% (-31 bps) | N/A | N/A |
| Q3 1999 to Q4 2000 | 4.75% to 6.25% (+150 bps) | 6.98% to 7.33% (+35 bps) | 9.66% to 9.54% (-12 bps) | N/A |
| Q1 2002 to Q3 2008 | 4.25% to 7.25% (+200 bps) | 7.78% to 6.57% (-121 bps) | 9.39% to 7.85% (-153 bps) | 141 transactions totalling $7.20bn* |
| Q4 2009 to Q4 2010 | 3.75% to 4.75% (+100 bps) | 7.76% to 7.50% (-26 bps) | 9.04% to 8.71% (-33 bps) | 79 transactions totalling $5.71bn |
| Q1 2012 to Q4 2021 | 4.25% to 0.10% (-415 bps) | 7.44% to 5.13% (-232 bps) | 8.72% to 5.84% (-287 bps) | 811 transactions totalling $100.7bn |
| Q1 2022 to Q4 2023 | 0.10% to 4.35% (+425 bps) | 5.06% to 6.25% (+119 bps) | 5.83% to 7.13% (+129 bps) | 96 transactions totalling $14.2bn |
| Q1 2024 to Q4 2025* | 4.35% to 3.77% (-58 bps) | 6.34% to 6.39% (+5 bps) | 7.13% to 7.17% (+ 5 bps) | 10 transactions totalling 450.8m |
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