Despite a widely-predicted slowdown in Australia’s broader property market in 2018, commercial sales in NSW will experience an uplift over the next three months.
New South Wales’ office market, particularly in Sydney and other high-density postcodes, has experienced a surge in recent months, despite the infrastructure “squeeze” thanks to projects like the Sydney metro line, and new apartment buildings taking up vacant land or the place of demolished towers.
Developers and planners have taken to responding primarily to Sydney’s ever-swelling population, opting to keep residential and infrastructure spending in the forefront – leaving the commercial sector to feel the pressure.
CoreLogic figures revealed NSW had the biggest rate of commercial sales in 2017, collecting 6,051 sales as part of the country’s total 18,281.
New South Wales also had the highest combined sales value of disclosed commercial properties, with an average price commercial property sale price at $3.7 million.
According to Anneke Thompson, director of Australia research at Colliers International, about 400,000 square metres of office space had been removed in Sydney and its outer suburbs as buildings are demolished to make way for the Sydney Metro and other developments.
Victoria found itself it close seconds in terms of commercial action with 4,625 sales at an average of $3.6 million.
Queensland recorded 2,952 commercial sales followed by Western Australia which collected 2,238.
The total numbers were an obvious downturn compared to 2016 figures, which said Australia collected 25,000 commercial sales during the year, but a number of factors in Australia’s major CBDs have indicated an improvement on sales may be on the way.
In Victoria, CoreLogic said the economy was running strong thanks to accounting for 25 per cent of the full time job creation across Australia, and the second highest retail turnover growth in the country at 3.36 per cent in the year to October.
They reported that as the Victorian economy expands, vacancy rates are likely to tighten, improving yields, suggesting strong performance of commercial real estate in Victoria going into 2018.
Meanwhile, in Sydney, its status as a “global city” provides optimism, as major companies all over the world look to expand and begin their search for the best place to bring their business to Australian shores.