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Economic recovery good news for commercial market

04 September 2009 Reporter

The RBA’s forecast for growth and recovery should result in a stronger commercial property market.

ANZ’s latest Australian Commercial Property Outlook said risk aversion is receding, sales activity below $30 million is rising and the recapitalisation of the larger real estate investment trusts has reduced the likelihood of fire sales.

According to the report, the industrial and office markets fared the worst over the last 12 months, but falls were still modest in comparison to the slump that occurred in the early 1990s.

Office values fell 45 per cent in the 1990s compared with the current 16 per cent, Property Council research found.

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“This is not the early 1990s revisited,” ANZ’s head of property and financial systems analysis Paul Braddick said.

“The key differentiator has been the relatively subdued supply.”

Mr Braddick predicted office vacancies for the five main CBDs would peak at more than 11 per cent by the end of 2010 – well below the long term average.

 

Economic recovery good news for commercial market
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