Commercial Investment on the Rise says CBA
The latest commercial property report from the Commonwealth Bank of Australia predicts a strengthening of investment in commercial property as the boom in residential development eases.
“The easing in high density apartment development is likely to see an increase in the sale of sites once earmarked for residential projects,” says Kevin Stanley, the CBA’s head of property strategy and research in the corporate financial services division, in an interview with the Australian Financial Review. “These sites may provide the opportunity to offer uses to service the market created by a fast increasing population in these new high density suburbs.”
Mr Stanley identified Melbourne and Brisbane as the cities developers are most likely to single out to run sites back into the market.
“In the meantime, the popularity of commercial property as an investment is set to increase further in 2016, amidst volatility of global and local financial markets,” adds Stanley.
The report further predicts that this demand is likely to push commercial property prices to record levels and that a significant trend for 2016 will be the return of investors to the commercial property market in Brisbane. With concerns of an oversupply of apartments in Brisbane, Stanley’s predictions are a positive sign for Queensland’s capital.
Speaking with Your Investment Property Magazine recently, Simon Pressley, managing director of property investment advisory firm Propertyology warned of tough years ahead for Brisbane’s apartment market following a rise in construction levels in recent years.
“Historically, Brisbane City Council approves 4000 apartments each year,” Pressley says. “However, 24,000 have been approved over the last two years. Much of this new stock is being purchased by ill-informed investors and they are unlikely to get the rental income they had hoped for.”