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Cash rate coup for commercial property

By Greg Bell

Making an investment in commercial property for sale on the Gold Coast can benefit you in a number of ways. This type of real estate generally provides much higher yields than residential property, and the high tourist numbers for the region mean businesses interested in retail leasing are always going to be seeking opportunities here. 

And with the latest measure from the Reserve Bank of Australia (RBA), it might become even easier to organise your finances for a purchase of commercial property in Surfers Paradise and beyond.

Historic lows for the cash rate

In a 5 May media release from RBA governor Glenn Stevens, it was noted that the cash rate would be cut by 25 basis points, to 2 per cent exactly. This could see interest rates reduced from what are already record lows, making it even more financially viable to secure lending for a commercial property purchase on the Gold Coast. 

According to the release, "prices for equities and commercial property have been supported by lower long-term interest rates". This is great for local purchasers, and there is good news in the RBA statement for overseas buyers too. Mr Stevens noted that the Australian dollar has remained weak against the US Dollar, and with commodity prices failing to regain strength there is further depreciation expected.

This is an open door for foreign investors who want to enter the world of commercial real estate on the Gold Coast, and a widening of the path to further growth. The extended Ray White Surfers Paradise Group has a client base of more than 200,000, which means buying this type of real estate will not leave you with unoccupied property for long. 

Retail growth stems from cuts

In response to the RBA statement, the National Retailers Association (NRA) has been cautiously welcoming. CEO Trevor Evans noted that when the cash rate was last cut, back in February, it boosted consumer confidence and saw a resurgence in spending. 

"We always welcome extra cash in the pockets of consumers, and hopefully today's rate cut will again boost spending in Australian retail stores," he said in the 6 May press release. 

He did warn that any signs of a weakening economy could diminish consumer confidence, which was the reason for hesitation about this cash rate cut. However, discretionary retail spending after the February reduction did increase, so there is hope that the May cut to the cash rate will continue to bolster expenditure.

Neville Sanders, President of the Real Estate Institute of Australia, echoed these calls in his statement regarding the RBA decision. 

"A cut in the cash rate will be very important in boosting consumer and business confidence," he stated. 

This will be good news for those interested in retail leasing on the Gold Coast. Increased spending means more profits that can be made, and it could signify a rise in demand for retail real estate on the Gold Coast – making now a great time to purchase this category of property. 

Secure the right expertise

Of course, good conditions don't immediately translate into a good purchase. To buy commercial real estate on the Gold Coast requires careful planning of finances, as well as an intimate knowledge of where tenants and buyers can be found. Location, infrastructure and future growth are all details that must be researched carefully. 

At Ray White Surfers Paradise, we have decades of experience connecting people with the right real estate and the right clients. Speaking to us is a wise first step on your path to portfolio expansion – give us a call and we can prepare the appropriate information and listings for you. 

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