At a glance:
● Expectations from Australians regarding the Victorian Commercial Real Estate.
● Expert’s take on opportunities in commercial real estate.
We expect investment in commercial real estate to continue to grow in Australia in 2022, as the reopening of borders will ease restrictions on international capital investing. Despite past border closures, the local property market has already been quick to adapt, allowing this investment to continue with investors having placed capital in Australia before the closures.
It’s normal to be curious about what comes next when looking at the Victorian market. Inner cities areas are being watched closely in anticipation of the end of 2022 and beyond.
At Axis Property, we have the opportunity to oversee market trends and buyer activity and research different types of data. Various economists and analysts have viewed the commercial real estate market forecast differently, while others may see our perspective as being accurate. We even receive inquiries periodically from people who believe that the commercial property market is going to crash, but they provide no data to support their predictions. We hope that we will remain optimistic until 2022 and beyond, but we will need to do our due diligence as always. Do not become emotional; make an informed decision!
Historically, the pace of commercial markets slows down as the end of the year approaches, but there is still plenty of momentum that is driving optimism into 2022. Probably the most important aspect to watch out for is the Reserve Bank of Australia’s (RBA’s) decision on whether to keep or increase its interest rate.
In the aftermath of the pandemic, job security and wage growth remain below average. The Australian economy strives to make up for the losses suffered between 2021 and 2022. While the economy and wages are soft, it is likely that the RBA will hold interest rates at historic low levels in order to help further stimulate the economy. Those levels won’t last forever, but it’ll be mighty difficult to raise them anytime soon.
On the other hand, Immigration and tourism will have a significant impact on the economy and the RBA may have to consider reevaluating their interest rate position when they arrive in Australia. With this, there is a possibility that the banks and financial groups are going to raise their rates against the guidance of the RBA, so it is something to watch out for.
Rental yields are on the verge of increasing after dropping to historical lows over the last two years. In the midst of the global pandemic, many tenants or renters moved in with friends and family for financial and emotional support. We are seeing higher employment gains, and sustainable income and many people looking to regain their independence as Victoria reopens. The prediction is that commercial property rents will increase in 2022 as a result of a supply shortage, allowing landlords or renters to charge more.
You’ll see some great investment value in the property market in 2022 if you plan wisely and strategically. Just be careful not to believe half-truths from well-meaning friends and family. You’ll find the best property for you if you seek professional advice.
As a commercial real estate investor, buy when you can afford it and keep a long-term perspective. If you follow some simple principles, you’ll achieve your goals.
Feel free to contact us if you are interested in buying a commercial property (whether to lease or sell). We can assist you in finding and negotiating the best deal of commercial real estate in Victoria.