Retail — Where to from Here?

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The Prime Minister’s “freezing” of parliamentary salaries is a clear endorsement of RBA Governor Stevens’ warning to curb our spending.

Last week, I mentioned the impact this could have on retail turnover — with a flow-on effect for growth in rental and sale prices for the Retail sector.

Retail Vacancy RatesYou can see from this graph there has been a continual decline in the vacancy rates — for all parts of the Retail sector. And it is this, which has underpinned the extraordinary growth in Retail property.

The Governor’s words, and accompanying interest rate rises, will have cooling effect — along with high petrol prices. Although this may be tempered by the tax cuts in July.

Nevertheless, you ought start to become very wary of the Retail sector from now on — particularly, where your tenants are selling items of a discretionary nature.

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