DATA & FIGURES
The industrial land vacancy rate is now close to 4%, according to CBRE research. The Australian Bureau of Statistics reported that commercial and industrial building approval values hit a record high in May due to new datacentre projects. The Reserve Bank of Australia has warned that datacentre spending makes up a growing share of Australia's investment in machinery and equipment, which was the single largest contributor to economic growth in early 2026.
THE SCENARIO
The Australian government is facing a complex scenario, with the rapid growth of AI datacentres raising concerns over inflation, housing, and industrial land use. The government must balance the need to support the growth of the digital economy with the need to protect the interests of other industries, such as freight and logistics, and ensure that the benefits of datacentre investment are shared by all Australians.
DIRECT QUOTE
"There's been a bit of a frenzy going on with datacentre builds … Land gets snapped up that should have been set aside for houses, and we've already got 90,000 workers short in construction. So if we are having a situation where datacentres are now taking up land for homes, we've got to pump the brakes on this." — Ed Husic, Federal Labor Backbencher
BBN INSIGHT
The growth of AI datacentres in Australia has both positive and negative sides. On the positive side, datacentres bring investment, jobs, and infrastructure to the country, supporting the growth of the digital economy. However, the negative side is that the rapid growth of the sector could stoke inflation, crowd out land for housing, and put pressure on industrial land use. The Australian government must find a balance between supporting the growth of the digital economy and protecting the interests of other industries and communities.