As we welcome 2017 and a shining new year, many are wondering where the property market is headed coming out of 2016. Greg Bell, the Director of Ray White Surfers Paradise, talked about his thoughts on the year and where 2017 is headed in regards to the Commercial property market.
Following the result of a very strong year in 2016, in particular a very strong second half, Bell says both national and international investors will identify South East Queensland suffered more so than Melbourne and Sydney out of the Global Financial Crisis.
"There were far more opportunities in SE QLD, for better yields than there were in Sydney or Melbourne. Those markets were very tight, and there had been a shortage of quality stock in Melbourne and Sydney. Particularly, self-funded super accounts from Australian investors, it just identifies, a 6 – 7.5 per cent yield in SE QLD, whereas Sydney you'd only get, maybe 3 – 4 per cent," Bell said.
"There's a lot more potential property capital growth because we were knocked about so badly with the GFC, that we see that there is room for growth from overseas investors. We saw a lot of investment properties being snapped up particularly the second half of 2016, and I see that continuing through 2017."
Bell suspects that we may get slight interest rate increases but not much, and rather than having their funds tied up in bank deposit accounts with low interest, investors will turn to and continue to gain momentum through commercial opportunities.
"I think it will be a year-long process. The first half will be significantly more aggressive from purchasers than what we've had, and we may see a slight slowdown in easy second half."
"That depends on government policy and interest rates and so on. Right now, the environment in the first half of 2017, in my opinion is going to be very strong."
On the leasing side, Bell says he is definitely seeing a lot of movement on retail and office space. With vacancy rates falling and rents starting to firm up, Bell believes the good environment for commercial property in 2016 will continue to gain great momentum throughout 2017, particularly in the first half.
Anywhere in Brisbane and the Gold Coast, Bell says, will see the most growth. With a lot of housing developments occurring in North Brisbane and Southwest of Brisbane, recently developed housing estates with shopping centres and nearby service stations will be highly sought after.
"They're the sort of assets with strong tenants in those growth areas, that are going to be in high demand, suburbs are building small cities and with that has to come a commercial component."
"2016 has been the best commercial year we've seen for nine years, and it's just showing that there is confidence back in the commercial market, businesses are starting to expand and take up office space, so the economy is starting to grow in SE QLD. I suspect that the momentum will carry over in a strong fashion and into the new year."
Greg Bell has almost 40 years of experience in the property market and, along with his expert team at Ray White Surfers Paradise, provides astute advice to both commercial and residential property investors and buyers. To discover the jewels of the Coast for yourself, get in touch with the commercial team at Ray White today, and have a fantastic 2017.