Retail Property Sentiment Highest in Queensland
The NAB Quarterly Australian Commercial Property Survey Q1 2016
reveals that accessing credit is becoming increasingly difficult for property developers, with debt and equity funding conditions again worsening and pre-commitment hurdles for new developments also rising further.
According to the survey, by sector, all commercial property
markets are tracking above long-term average levels, except CBD hotels. However, says NAB Chief Economist Alan Oster: “Property professionals in the CBD hotels sector are also the most confident in the next year, followed by office and retail. Confidence levels are broadly similar across all market sector participants in two years’ time.”
sentiment was highest in Queensland, with capital returns for retail property led by Queensland and WA. The best locations were cited as being neighbourhood and CBD. Retail market conditions
in Queensland were found to be neutral, with neither an under supply or over supply.
In the office market, capital growth
in Q1 fell mildly in Queensland, where vacancy is holding steady. The Queensland office market was said to be “quite over-supplied” and tipped to remain so over the next year.
In the industrial market
, national sentiment improved in Q1. Looking ahead, the report states that confidence is strongest in Victoria, NSW and Queensland and prospects for capital growth over the 1-2 years are strongest.
While the rental environment is still difficult in most states, with rental growth flat in Queensland, Queensland and NSW are forecast to provide the best income returns in the next 1-2 years. In Queensland, vacancy rates are expected to trend down over the same period.
Overall, the commercial property market
in Queensland appears remarkably stable. It may lack the highs currently being experienced in some sectors in NSW and Victoria but is not facing the lows and serious over supply problems currently being faced by investors in WA, SA and NT.