Commercial property could be what grows the market for agents

The second quarter of this year has shown that commercial property has been nothing but a boost for the overall market, even if retail and CBD hotels aren't showing the same results in their individual performances.

The NAB Commercial Property Index, contained within the bank’s commercial property survey for Q2 2019, has indicated overall market sentiment as lifting by 9 points to +7 across April, May and June.

The swing has apparently been led by strong optimism across New South Wales and Victoria, with the report noting that by sector, positive sentiment has increased the most for commercial office spaces.

According to the NAB index, the office sector is well clear of its nearest competitor and sitting at +39 points, which is 19 points clear of the industrial sector.

Despite such a points difference, the bank has considered the industrial sector as “outperforming” commercial property as a whole with an expectation of further future growth.

This is due to nationwide statistics showing that industrial property experienced a 5-point swing further towards the positive since the first quarter of 2019.

While retail has improved slightly since the first quarter of 2019, it’s still the worst performing sector of the commercial properties surveyed (from -44 to -38).

According to NAB, this is “perhaps reflecting the outcome of the federal election and firming expectations around rate cuts” and is amid difficult retail business conditions and subdued household spending.

The biggest quarterly negative move, however, was evident in the CBD hotels sector, which has witnessed a steady fall since the third quarter of 2018 that has resulted in a survey low for the industry, the report said.

CBD hotels has dropped by 15 index points since the fourth quarter of 2018, where it sat at a neutral 0.

It now sits at -15, and is expected to drop a further 25 points in the next two years to -40 on NAB’s index.

Read more here

Join us November 12-15 for the Property Portal Watch Conference Madrid 2019.