Published 16 March 2026. Figures and market conditions described here were current at that time and may have changed since.
Investors looking to fit out office spaces in Brisbane and Perth are benefiting from the competitive costs in Australia, though prices are expected to rise significantly over the next year.
According to Knight Frank's Fit-Out Cost Guide 2026, Brisbane and Perth recorded the most affordable office fit-out costs in the country at an average of $934 per square metre. However, both cities still ranked among the top 10 most expensive capital cities across the Asia-Pacific region.
Sydney and Melbourne remained the most expensive Australian capitals for office fit-outs, with average costs of $1,334 and $1,300 per square metre respectively. The significant price gap between these major cities and their mid-sized counterparts reflects different stages in their market cycles and varying labour pressures.
The report revealed that fit-out prices across Australia are set to increase between 2 per cent and 5 per cent over the next 12 months. The anticipated rise is being driven by tightening labour markets, sustainability requirements, and global trade uncertainty affecting material costs.
Singapore topped the Asia-Pacific region as the most expensive market for commercial office fit-outs, with costs exceeding $2,000 per square metre.
Knight Frank Australia national head of project management Mark Blinco said the Australian market varies significantly depending on location.
"The Australian market is at very different points in its cycle depending on what capital city you look at," Blinco said. "We have Sydney, where fit-out costs remain high and will likely continue to grow due to labour and material cost pressures, but also softer markets like Brisbane and Perth, where costs remain steady but are overall more manageable, even with infrastructure booms underway for the Olympics in 2032."
Blinco noted that Melbourne's office market continues to experience the lingering effects of the city's COVID-19 shutdowns and changes to office mandates, which have kept fit-out prices elevated.
Knight Frank head of project management for Queensland, Paul Kennedy, said Brisbane's competitive pricing position may not last long.
"Brisbane's average fit-out cost places it below Sydney and Melbourne, keeping the city attractive for occupiers managing capital budgets; however, broader construction cost escalation is unavoidable," Kennedy said.
Kennedy highlighted that labour shortages pose a significant challenge for the Queensland market. "Labour shortages reinforce this pressure. Queensland faces a construction workforce shortfall peaking near 50,000 workers in 2026–27, elevating risks of delays and cost overruns," he said.
The workforce shortage in Queensland is expected to create additional pressure on both timelines and budgets for commercial property investors undertaking fit-out projects in the coming years.
Knight Frank head of global portfolio solutions for Asia-Pacific, Francesco Demarco, said investors need to take a more strategic approach to fit-out planning. "The challenge for occupiers is no longer controlling fit-out costs, but understanding why costs are rising and what it means for long-term strategy," Demarco said.
"The return on capital investment is increasingly harder to justify. Labour constraints, sustainability compliance, and trade-related material pressures are structural; they will likely not resolve quickly. Therefore, the smart approach is to integrate fit-out planning into broader portfolio decisions from the outset, aligning specification levels with business requirements, and using cross-market cost data to make more informed capital investment decisions."
Want to know if this applies to you?
Talk it through with a Finfident broker. It's free and there's no obligation.
