From the top floor of a CBD office tower to a suburban childcare centre or a sprawling warehouse on the outskirts of town, every business needs a place to call home.
And it just so happens that commercial property has been buzzing lately.
The Australian Prudential Regulation Authority’s (APRA) most recent Quarterly ADI Property Exposure Statistics detailed a 9.4 per cent year-on-year jump in lenders’ commercial property exposures, which reached $464.1 billion.
Exposure limits also rose, climbing 9.0 per cent year on year to $498.9 billion.
Analysing the data, market research firm Agile Market Intelligence said it was a sign that lenders were starting to see a real opportunity in the sector.
“They’re not just maintaining exposure – they’re actively growing it and increasing their risk appetite limits,” Michael Johnson, director of Agile Market Intelligence, says.
“That’s a strong confidence signal.”
Part of what’s driven the activity could be favourable rates, with the Reserve Bank of Australia (RBA) slashing the cash rate three times this calendar year already.
James Kelder, a commercial broker from Queensland-based brokerage Green Finance Group, says the reduction in the cost of funds has improved borrowing capacity and made the income investment metrics on commercial properties more favourable.
“The heightened cost of debt relative to cap rates has for a long time required investors and developers to contribute more cash into projects,” he adds.
Market sentiment also seems to be on the rise.
In September 2025, National Australia Bank (NAB) chief economist Sally Auld told a NAB Commercial Broker Economics Update Webinar that there was every reason to be optimistic about the state of the commercial property sector at the moment.
“It’s really clear that the mood has shifted in that [commercial property] space, and that’s partly a function of valuations, partly a function of rates having come down, (because we know that’s a pretty rate sensitive sector),” she said.
“Generally speaking, my view would be [that] it’s right to be reasonably optimistic.”
Building opportunity
An increasing number of brokers also seem to be exploring commercial mortgages.
The Mortgage and Finance Association of Australia’s (MFAA) most recent Industry Intelligence Service (IIS) put the number of brokers also writing commercial loans at 7,023 for the six months to September 2024, up 24.2 per cent from the same period in 2023 (5,654).
As such, the value of commercial lending settled by mortgage brokers also swelled to a high of $22.6 billion, up 31.2 per cent on the previous corresponding period ($17.3 billion).
Brokers on the ground are seeing these shifts firsthand.
Matthew Chik, a Melbourne-based commercial broker at MC Finance Group, says he’s observed several market shifts that are creating new opportunities for brokers.
“Several major lenders are now offering lease-doc solutions for specialised property classes such as childcare centres and petrol stations – areas that were previously considered too complex for streamlined assessment,” he says.
Other initiatives Chik flags include the introduction of lower interest coverage ratio (ICR) requirements to improve borrowing capacity, higher small business banking thresholds, reduced covenant and review requirements, and sharper rate reductions.
“Overall, lenders are clearly signalling a stronger appetite to support businesses and investors, and that’s creating very positive momentum for the commercial mortgage sector,” he says.
Isabella Constantinou, a finance broker from Sydney-based brokerage Simplicity Loans & Advisory, also notes the increased appetite from banks that seem to be taking another look at segments they may have pulled back from, offering more competitive prices and more non-property-secured lending.
“Non-bank CRE lending and the private credit sector [also] continue to grow strongly and there is a lot of efficiency and innovation happening in this space,” she says.
“Borrowers are increasingly expecting alternative documentation options, faster turnarounds, more flexible covenant terms.
“Non-banks have leveraged this well, and banks are now trying to catch up.”
Meanwhile, Son Pham, a commercial broker from Sydney-based brokerage Rethink Financing, says he has generally observed more lenders coming to the space.
“Traditionally they have been banks but the rise of non-banks entering the market has increased competition, meaning more competitive rates and terms to capture market share,” he adds.
What’s next?
So, what areas in commercial mortgages are worth brokers’ time and investment?
Pham notes that lease document loans are becoming increasingly attractive.
“Lease doc loans can be very advantageous because lenders assess only the commercial property rent and the liability against it on a standalone basis,” he says.
“They ignore everything else outside this transaction, which helps investors continue to build their portfolio even when residential lending limits are restrictive.”
Constantinou also says she sees big demand for industrial and logistics-based properties from e-commerce businesses, with lenders generally seeing this area as less volatile.
Mixed-use projects are another potential growth area.
“Demand for land, DA-approved sites and construction finance is strong as this sector stabilises,” she adds.
Meanwhile, Melissa Ashcroft, a commercial broker from Sydney-based brokerage AAA Financial Group, says she has observed a clear split in the commercial lending market.
“Banks are loosening policy but remain conservative in construction, while non-banks and private credit funds are stepping in with speed, higher leverage, and flexible structures,” she says.
“Borrowers have more choice – but need guidance to navigate it. Banks are trying to get back into the space, some are more accommodating than others!”
