Commercial property attracts investors
As economic and market conditions shift, the commercial sector offers investors a different way into property, Stanley said.
“Commercial property… has a higher return and has more stable returns, longer-term leases. You’re locked in,” he said, adding that negative gearing “still applies” to the sector.
Private investors remain central. “It tends to really be the foundation of commercial property investing year in and year out,” he said. So far in 2026, private buyers account for about 33% of the market, he said.
These private investors typically focus on smaller-scale assets like smaller warehouses, smaller shops, and childcare centres, which can have an average sale price of under $5 million, Stanley said.
Market conditions remain steady
Across Australia’s commercial property market, transaction activity for properties priced above $1 million has moderated up to the end of April amid the changing conditions of 2026, Stanley said.
Even so, “for the market to still be tracking just 12% below where it was last year is actually not a bad result,” he said, citing interest rate increases and global uncertainty as examples of the headwinds investors were facing.
But commercial property’s ability to generate income continued to support the sector, he said. “Rents continue to increase across all of the property sectors incrementally” while yields “are relatively stable at the moment,” he said.
Retail stands out
Within commercial property, retail is one segment performing strongly, Stanley told CommBank View host Mandy Drury.
“The overall vacancy rate in shopping centres around Australia is below 5%,” he said, pointing to strong population growth and limited new supply.
For investors, this was a “structurally perfect combination” of strong demand and constrained supply, he said,
Read Kevin Stanley’s full research note: How could the housing tax policy changes impact commercial property