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Property benefits from economic strength

By Greg Bell

Positive conditions in the Australian economy have knock-on effects for various sectors, including industrial leasing on the Gold Coast. After all, if people are more confident, they are going to be increasingly inclined to invest in property, bringing advantages to other industries.

There have been plenty of groups keen to provide commentary on how well the economy is performing, but perhaps one of the best placed is the Reserve Bank of Australia (RBA). At their monthly meetings, members of the RBA monetary policy committee reflect on how buoyant the economy has been, as well as what the future has in store.

This was the case on 1 September, when the board gathered to determine the official cash rate would remain at two per cent for another month. The domestic economy was once again in the spotlight, with RBA members reflecting on the mixed conditions that have persisted for some time.

Property market leads the charge

It has often been the case over recent months that the property sector has been a standout performer of the national economy – and this was no exception last month. RBA governor Glenn Stevens highlighted that conditions had "remained strong" overall – a situation that is expected to continue at least in the near term.

People's attention may now be turning towards commercial property on the Gold Coast, as the RBA revealed a decline in lending for investment housing over the course of July. Dwelling investment was also down during the three months to June, which may leave investors in search of alternative sources of income.

Confidence is on the up

It isn't just the property sector that has witnessed an upswing in confidence over recent months, as the RBA also pointed to an increase in consumer sentiment. This is contrary to the latest ANZ-Roy Morgan Australian Consumer Confidence Index, which declined 1.3 per cent during the week to 13 September.

However, as the index authors pointed out, this was prior to the federal leadership coup that took place earlier this week, the effects of which are still yet to be seen.

The RBA revealed an "increase in consumption growth", which is often a key indicator of improved sentiment. If people are more willing to spend – on commercial property for sale on the Gold Coast or otherwise – then this generally bodes well for the economy as a whole.

Looking to the future

Although it's impossible to forecast what might be just around the corner, it nevertheless seems the economy is starting to move in the right direction – albeit at a slower pace than many analysts would like.

The impact of the change in prime minister on consumer and business sentiment is yet to reveal itself, and there is still uncertainty over what the coming months will have in store for the official cash rate.

The economy has also faced the threat of the decline in Chinese stocks over recent weeks, as well as the knock-on effects of the devaluation of the Australian dollar. Notwithstanding any further significant turmoil, there's a chance the economy will pick itself up and be restored to its former glory days – but all it takes is the slightest global event to put this in jeopardy.

For the time being at least, property investors have a relatively positive outlook that they should be keen to make the most of while the strong sentiment lasts.

For help buying commercial property on the Gold Coast, be sure to get in touch with our experienced team. We have a strong knowledge of the local market and could be your ticket to investing in this desirable part of the country.

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