Australia’s commercial property market has a “supply and demand capacity imbalance” as pricing continues to tumble, according to Marsh.

The global broker’s latest market tracker shows property rates contracted 15% in the June quarter – their steepest decline since premiums started falling in the second quarter of 2024.

 

 

Marsh Risk Pacific head of property Jamie Coughlan says the second-quarter numbers show how “highly competitive” the segment is.

“This is not an outlier as a result – this is the fifth consecutive quarter of double-digit falls,” he told insuranceNEWS.com.au.

“We are seeing a continuation of increased competition and more capacity being offered. We have a supply and demand imbalance, with more capacity being offered than is needed.

“There is a reason for that: Australian property portfolios are profitable – this is attracting new entrants and those in the market are wanting to grow their business. I don’t have any reason to believe these underlying dynamics will change in the short term.”

 

 

Overall, commercial rates in the Australia-led Pacific market declined 13% in the April-June period, according to the broker’s Global Insurance Market Index.

The drop was more than double the global decrease and marked the 10th straight quarter of falls.