COMMERCIAL PROPERTY MARKET 2012 is the third year of recovery since the GFC and, although sentiment is still a little fragile, there is definite growth in demand for commercial properties, especially in the Sydney and Melbourne markets. International investors appear to be far more confident about the Australian economy than we are here at home. Domestic investors are still finding it difficult to source finance and, like many of our members, lack confidence in the government. China-led demand for commodities should continue for the rest of 2012 and this will help shape Australia’s commercial property market. Almost two-thirds of members (62%) think commercial property prices will remain the same for the remainder of 2012, while the remainder said they think they will decrease. All South Australia and Western Australia members said commercial property prices would stay the same, while all Tasmanian and Alice Springs members said they would decrease. The greater proportion of New South Wales, Victorian and Queensland members said they would remain at current levels, whereas 14% of Victorian and 8% of Queensland members said they would increase. It is a similar trend for commercial rental prices with 53% of members saying they thought they would stay the same and the majority of the balance saying they would decrease. A key factor here is low business confidence as a result of ongoing economic uncertainty both here in Australia and overseas – although there is much more nervousness domestically.
Commercial Rental Prices – Next 6 Months National
NSW
VIC
QLD
SA
TAS
8%
–
14%
18%
–
–
–
–
Down
39%
47%
50%
27%
–
100%
17%
100%
Flat
53%
53%
36%
55%
100%
–
83%
–
Up
WA NT - Alice
Almost half the commercial property member respondents (49%) said they thought the industrial segment represented the strongest growth in the coming six months, followed by retail (20%), office (13%), hospitality (10%) and then the service industries (8%).
2012 PROPERTY MARKET OUTLOOK – MID YEAR UPDATE FIRST NATIONAL REAL ESTATE
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