Office Vacancy at 22% — Should Parramatta Pivot to Build-to-Rent Apartments? — Sydney Auction Clearance Rate at 65%

Weekly Market Focus

As Parramatta’s skyline continues to rise, a “battle for space” is unfolding over the city’s future identity. Should prime CBD sites be reserved for office towers to strengthen its role as an employment engine, or should they shift toward high-rise residential and build-to-rent developments in response to the housing crisis? This is more than a technical planning debate — it is a choice about the city’s long-term direction.

The City of Parramatta Council has made its position clear: employment land must be protected. Under its latest economic strategy, expanding office and employment space remains a priority as the population continues to grow. Lord Mayor Martin Zaiter has warned that if the city centre were to become “all housing,” forcing residents to commute elsewhere for work, it would represent a planning failure. To meet its target of creating 150,000 additional jobs by 2050, the council argues that existing employment land must be safeguarded through planning controls.

Yet the current reality presents challenges. Office vacancy in Parramatta has climbed to 22.1%, the fifth highest in Australia. Much of the available space consists of fragmented floorplates, making it difficult to accommodate large corporate tenants seeking full-floor or multi-level premises. At the same time, with apartment development margins under pressure, more developers are turning to the build-to-rent (BTR) model — a long-term rental income strategy that is increasingly viewed as one of the most viable development pathways in Western Sydney.

The 47-storey HOME Parramatta build-to-rent tower near Parramatta Square opened earlier this year and reportedly leased around 10% of its apartments within weeks, with minimal marketing. The developer says local demand has been strong. The broader question, however, remains: when employment space and residential demand compete for the same land, should Parramatta aspire to become a “second Sydney CBD,” or evolve into a high-density, residential-led satellite city? The outcome of this spatial contest will shape the city’s long-term trajectory.

Last Week’s Auction Results

Sydney: A total of 1,489 properties were taken to auction, with results reported for 939 properties. Of these, 611 were sold, resulting in a clearance rate of 65%. The total auction value reached AUD 662,799,547, with a median price of AUD 1,702,500.

Melbourne: A total of 1,634 properties were taken to auction, with results reported for 1,233 properties. Among them, 813 were sold, achieving a clearance rate of 66%. The total auction value amounted to AUD 623,690,110, with a median price of AUD 994,500.