In August 2025, what are we seeing?

From the point of view of a keen economic observer, 2025 has so far delivered an interesting mix of stability and shocks. Many of the shocks have emanated from 1600 Pennsylvania Avenue, but these have been offset by relatively benign fundamentals and an improving interest rate environment.

Whilst AI implementation continues to be a favourite talking point for journalists and doomsayers, the general impressions across the community seem to be positive, with productivity improvements likely to flow through many industries. The employment impacts of these technologies are as yet unclear, however redeployment of labour has happened before and will, no doubt, happen again.

Since April 2025, the Australian economy has shown promising signs of recovery and growth, offering renewed optimism for commercial property market participants. Whilst some national economic issues remain very concerning, the system seems to be coping and growing moderately. Concerns include:

• lack of productivity growth within the economy;
• labour market shortages, leading to time and cost blowouts of major infrastructure projects and trickling down to the commercial projects;
• housing supply constraints, leading to increasing prices and housing stress for too many in the community; and
• overreliance on government-sourced revenue, both in business and for individuals.

As always, these matters will be addressed over time on a national level. Also as always, the response from the commercial property industry will be to deploy resources where the return on investment appears to be highest (within acceptable risk parameters).

Thus, in the long term, the market should be efficient. However it will also remain cyclical – as always.

So our primary task as participants in the commercial property investment and development market remains to constantly monitor and review the market for opportunities and long term value – as always.