The Australian commercial property market right now is heavily favoring buyers over sellers. Real estate experts have been watching as bond yields have steadily declined over the years in the country. This has all led to lowering prices across the country and a market in which people would do well to invest. While these bond yields are declining in value at the moment, this will not always be the case. Some experts believe, in fact, that the cost of property is too cheap for the market’s good, but the numbers will stabilize in time. While this stabilization is good for realtors, it will mean an increase in cost for those purchasing property. Those who are thinking of getting into real estate investing are advised to take the plunge soon.
Commercial property acquisitions is a concept that’s a bit complicated for the beginner, but Holden Capital offers a great way to get started with top five acquisition strategies. Think of this as a primer for immersing yourself in the world of commercial property acquisition in Australia.
One leading expert in the field insists that there are three possible outcomes with the way the Australian commercial property marketing is going now. The first outcome is that the cost of the bond yields stays low, which will only serve as an urgent reason for buyers to invest. The second outcome is that the bond yields rise to about 1% higher than they currently are, which will be an intermediate solution in which both realtors and buyers are happy. The third outcome, one which isn’t very palatable to buyers, is that the bond yields go up by more than 1%, and it becomes a seller’s market all over again.
The key point to make here is that inflation is a key factor in the state of the market. Inflated pricing will affect the kinds of property development loans and funding for property development that one can obtain. It’s not just a matter of the actual price of the property being affected by the market.
Luckily, experts agree that the second outcome seems to be the likeliest of the three. While this will involve a slight increase in cost for commercial property, it won’t be nearly as drastic as it would be should the bond yields go up by more than 1%. While the current market looks to be unfair for realtors, this second outcome would lead to both parties being happy, and it would be a more stable commercial property market overall.
There exists an index database that contains data from all of the commercial property transactions conducted in Australia. Along with allowing real estate experts to get a good idea as to how the market is doing and predict how it might do in the future, this index database allows real estate experts to analyze current data and compare it with what has come before in previous years. For instance, this year’s annualized total return was sitting right at a total of 13.3%. When you compare this with last year’s total of 11.8% and an earlier total of 10.5%, it’s clear to see that the market is definitely in a rebound for buyers.
These totals were fairly comparable to retail, office, and industrial sectors as well. Retail has been sitting at 11.2% as recently as June of this year. Office real estate was a bit higher than the other two at 14.6%. Lastly, industrial sat right at 13.5% overall. While these types of real estate are quite a bit different from commercial property, it’s still important to keep an eye on how the market is looking in all areas of real estate in order to isolate common trends and identify potential warning signs for the future.
In general, the Australian commercial property market is favoring the buyer at this point. While some real estate experts claim that the market is actually skewed towards buyers and as a result is unfair for real estate agents, other experts insist that the market is set to stabilize and become fair for all parties involved in the future.
While looking into what the experts in the field have to say is quite important, it’s just as important to consult with professionals in your area to see what the real estate market looks like near you. It’s better in these matters to get into the specifics of nearby neighborhoods as opposed to totally working in generalities. Of course, everything that you hear should be taken with a grain of salt, considering just how rapidly the commercial property market can fluctuate in time.
The figures are of course set to change as we continue to see the market grow and evolve, but now is as good a time as any to invest in commercial property in Australia.

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