Hybrid work has changed more than where people sit. It has transformed how, when and why workers come together. This shift has major implications for how we design and cost Australian offices.
Hybrid work is not a passing fad
Hybrid working is here to stay. Data from the Australian Bureau of Statistics shows that in August 2025, 36.2% of employed people worked from home, almost identical to the 36.3% in 2024 and up from around 30% pre-COVID (see chart). The change is more stark among employed people who work most of their hours from home, which jumped from about 5% pre-COVID and has settled at around 15%.
While working from home has fallen from its pandemic peak, the broadly stable rates suggest it is entrenched.
For most people, working from home takes a hybrid form. In 2025, 46% of people who worked from home did so 1-2 days a week, with 26% spending 3-4 days a week at home (see chart). These proportions have barely shifted, further indicating that hybrid work is routine.
Sydney, Melbourne and Canberra have the highest rates of working from home. These cities have a high share of jobs well suited to hybrid arrangements, including professional services such as finance, IT, legal services and the public service.
Distance plays a part too. Longer than average commuting times in Sydney and Melbourne encourage greater working-from-home.
And then there’s living memory. People in Melbourne and Sydney lived with COVID-19 lockdowns for the longest, sustaining the shift in culture and working practices.
Re-engineering workplaces for a flexible future
Hybrid work has decisively changed how Australian offices are used and designed. Fixed, desk-centric layouts are giving way to flexible, collaborative, technology-enabled workplaces. This transition began pre-2020, but the pandemic stripped away any doubt about the trend’s direction.
One of the most notable changes is spatial. Traditional offices were typically designed with open-plan workstation clusters and enclosed meeting rooms: often a mix of 4-, 6- and 10-person spaces, plus a large boardroom. However, larger meeting rooms (those designed for more than 4 people) are often underutilised, averaging only 2.6 to 3.4 occupants per meeting.
With attendance now varying across the week, offices are increasingly planned around peak and off-peak utilisation patterns to better match actual occupancy.
Similarly, desk usage has declined, with only 16% of desks occupied for more than 5 hours per day, reducing the need for one‑to‑one desk. Hot-desking is now much more common with 53% of employees now sitting in unassigned seating, up from 30% in 2019.
“Organisations thriving today are those that understand hybrid working isn’t about where people sit – it’s about how they connect, collaborate and create value. Workplace design has become a strategic asset, shaping organisational culture and enabling the flexibility expected from the modern-day employee.”
Oliver Nichols, Director, RLB
In contrast, collaborative and flexible areas have seen a marked increase in use, reflecting a broader trend toward dynamic, activity-based workspaces. The allocation of flexible space in the office has more than doubled since 2022 to 15.5%.
Australian businesses are redesigning offices to support advanced video‑conferencing and smart meeting rooms, ensuring remote and in‑person workers can collaborate effectively.
Employee wellbeing and sustainability are also core design considerations. Australian employers are increasingly prioritising mental health supportive environments, ergonomic setups and sustainable materials.
Fitout costs now follow behaviour, not headcount
Hybrid work has made office design – and therefore fitout costs – more sensitive to how organisations actually operate. Patterns of attendance, industry norms and operating models now matter as much as floor area.
For example, a technology firm with staff onsite just once a fortnight may choose a small, collaboration-led footprint. This fitout cost typically sits at between $2,400 to $2,800 per square metre, depending on the quality. In contrast, a finance firm with staff in the office four days a week may require a larger workstation-based layout, complemented by meeting rooms, focus spaces and high-end video‑conferencing technology. Costs for this type of fitout may rise to $3,600 per square metre.
This shift from partitioned offices and rows of dedicated desks to a mix of flexible work zones has also changed pricing conventions. Fitouts are increasingly scoped and benchmarked using cost per square metre of net lettable area, rather than cost per workstation or per employee. This is because the primary cost drivers are now the mix of space types and the level of services and technology required.
The key takeaway? Headcount is no longer the dominant cost driver.
Landlords are responding in parallel with ‘experience’ features like activated lobbies, collaborative third spaces, rooftop terraces, wellness rooms, end-of-trip facilities, tenant lounges and high-quality conference amenities. All features designed to draw people into the workplace.
Location has always mattered in commercial real estate. But as office attendance becomes more selective, tenants are placing greater weight on connectivity, driving demand for office stock centred around key transport hubs within CBDs.
While hybrid workplaces are often more expensive than traditional fit-outs, due to higher expectations for technology, flexibility and sustainability, the higher outlay is viewed as a strategic investment in talent attraction that can be offset by a smaller footprint.
For RLB clients undertaking an office fit-out, landlord investment in activated lobbies and shared amenities, such as tenant lounges, end-of-trip facilities, and flexible ground-floor uses, may increase lease costs but can reduce the office footprint required. These features carry real capital and operating costs, but they also influence leasing appeal, tenant retention and long-term asset resilience.
RLB Melbourne, Collins Street.
Beyond the workplace – and where costs are shifting
Hybrid work has reshaped Australian CBDs in ways that flow directly to office development and operating costs.
What was once a 9am to 5pm Monday to Friday ‘central business district’ is evolving into a 24-hour entertainment centre.
The data makes this clear. In Sydney, trips to and from the CBDs on public transport are down about 25% on weekdays but only 6% on weekends. This divergence matters for asset owners and tenants alike: buildings designed for peak weekday intensity are now competing with precincts designed for all-week appeal.
State governments and local councils have invested in attractions to draw people into CBDs, with public realm upgrades and new train lines like Sydney Metro, Melbourne Metro and Cross River Rail helping boost visitation.
CBD retail is also recovering, boosted by new flagship stores and better public transport links. The return of international tourists has also helped, with overseas arrivals now higher than they were in 2019.
So, is hybrid work here to stay?
Despite the headlines about companies forcing employees back into the office, a few factors suggest hybrid work is likely to endure.
First, the “return to the office” narrative understates what is really happening. Many companies are formalising hybrid work policies rather than demanding full-time in-person work.
Second, younger firms, new industries and fast-growing occupations are more likely to embrace hybrid work, offsetting legacy firms that are more likely to require full-time office attendance.
Third, employees value hybrid working arrangements. Workers are willing to forgo up to 10% of their salary to work from home at least some of the time. Hybrid workers also report higher job satisfaction and better work-life balance.
Finally, companies realise the model makes good business sense. Firms that offer hybrid working report lower quit rates, reflecting higher employee job satisfaction, and translating directly into hiring cost savings. This is on top of the potential savings on wages, and office space.
Hybrid working has also boosted workforce participation among under-represented groups by reducing barriers to employment and better-paid jobs, notably women, older Australians, people with disabilities and carers.
And despite concerns about the impact of hybrid work on Australia’s productivity, evidence shows hybrid models don’t weigh on productivity growth. Well-designed hybrid models can successfully combine in-person collaboration with focused work at home.
Remote work can even boost output as workers redirect time once lost to commuting to more productive tasks – although, perhaps, not on Fridays.
Key considerations when designing a new office
Plan office size for peak demand, not average attendance. Modelling peak utilisation, and testing strategies to smooth peaks such as hot desking and flexible work zones, can reduce wasted space without compromising functionality.
Use desk sharing thoughtfully. Hot desking can help reduce footprint and free space for collaboration, but suitability depends on the work mix and the impact on productivity and team cohesion.
Plan meeting space from actual usage patterns. A mix of focus rooms, small pods, medium meeting rooms and open collaboration areas typically performs better than an oversupply of large, underused rooms.
Factor in common-area spaces. Shared meeting rooms, lounges, end-of-trip facilities can reduce the required internal footprint.
Avoid relying on a simple cost per workstation metric. Fitout costs can vary widely. In hybrid workplaces, costs are driven by the design brief – think technology, services, space mix and finishes – which means two offices with the same headcount can have very different cost profiles.
Main image: Macquarie Group Global Headquarters, Martin Place, Sydney. Brett Boardman.
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