Ross Elliott from The Pulse argues that cities are undergoing a long‑term structural shift away from CBD‑centric office economies towards polycentric, suburban‑focused urban systems.
The shift has been driven by three primary forces.
First, growth in finance, property, and business services — the sectors that fuelled CBD expansion in the 1990s–2000s — has been slowing for years. In contrast, health and education, which are more suburban‑based, have become the main engines of metropolitan job growth.
Second, the COVID-pandemic lockdowns accelerated decentralisation away from CBDs.
Lockdowns proved that many office workers could work effectively from home, saving time and money by avoiding commutes.
These habits have stuck, with companies struggling to get staff back to the office 5 days a week. Commuting to CBDs remains below 2019 levels.
Elliott notes that the national CBD office vacancy rate in Australia is 14.9%, the highest in 30 years. The vacancy rate is 19% in Melbourne, 13% in Sydney, and 10% in Brisbane. Each is well above the healthy equilibrium of around 5% vacancy.
Third, AI is expected to displace or transform administrative and lower‑order professional jobs, many of which are CBD‑based.
Forecasts from Brookings, Deloitte, Job Skills Australia, IMF, Goldman Sachs, and the World Bank all suggest that around one‑third of workers could have half their tasks affected and that CBD office demand will fall further as AI automates traditional office roles.
The upshot, according to Eliott, is that CBDs are changing and increasingly functioning as amenity districts — i.e., cultural, entertainment, sporting, dining, hotels, conferences, etc.
Accordingly, they must be repurposed by converting older offices to education, health, or mixed use, which is more viable than residential conversions.
Elliott argues that the idea of CBDs as primarily “places where office workers go to work” is now outdated.
The implication is that suburban hubs will become the main centres for employment, health and education services, and social infrastructure.
As a result, planning must shift towards supporting suburban job clusters, improving suburban transport, strengthening local economies, and reducing reliance on CBD‑centric peak‑hour systems.
This transition will take time but is already visible, says Eliott:
“The changes are happening before our eyes now, and the evolution of metropolitan-wide economies into a more polycentric model is obvious to all but the most ardent traditionalists”.
“CBDs will survive but they will serve different needs in the future. Suburban centres will grow and thrive but that will require a new mindset by policy makers and all levels of government. Resisting these inevitable changes will mean the worst possible outcomes for both CBDs and the suburbs”.
In my opinion, the CBD’s loss of influence is the suburb’s gain, and the decentralisation of activity away from CBDs will bestow important societal benefits.
It will eliminate the need for many workers to waste money, fuel and time travelling into a central location to work.
It will free up transport infrastructure, reducing the need for massive investments to expand capacity.
It will also reduce the need for companies to waste substantial sums on expensive office space.
Decentralisation, including working from home, could also be better for the environment, as it reduces traffic, congestion and emissions on our roads.
The CBDs have received too much political attention and funding for too long. It’s time to shift focus to the suburbs where the bulk of people actually live and work.
