H2 2025 Australian Lender Sentiment Survey

CBRE Research’s H2 2025 Lender Sentiment Survey received responses from key commercial real estate lenders across local banks, international banks and non-banks. We find:

• Australia’s cash rate cutting cycle is likely nearing its end, with 80% of local lenders expecting at most one more 25bps rate cut, consistent with domestic bank views. 
• Appetite for new loans remains positive with 50% of lenders wanting to grow commercial real estate exposures and only 5% of surveyed lenders intending to decrease their book.
• Lender investment preference continues to be dominated by the Industrial & Logistics sector, followed by Residential. Preference for the data-centre sector has continued to decline from its highs in H2 2024, whilst local lender activity remains cautious towards the office sector.
• Credit margins have shown strong signs of stabilisation with 80% of lenders expecting flattish margin movement over the next 3-months.
• Hedging requirements remain at low levels, with 60% of lenders having an interest rate hedging requirement between 0-25%, down slightly from 68% in H1 2025.
• LVR requirements have declined slightly with 75% of surveyed lenders having a requirement of 50% or above, a slight decline from levels seen in H1 2025.
• Development feasibility constraints is top of mind for lenders, with elevated construction costs noted as the largest challenge facing Australia’s lending market in 2026.  
• Loan activity associated with acquisitions is likely to grow over 2026 with investment volumes projected to accelerate nationally. Loans for developments are projected to remain subdued with supply pipelines nationally facing downward pressure.