FOR WHAT IT’S WORTH … my view is that there is growing evidence to suggest inflation will not be as sticky as many pundits would have you believe.
Despite a recent surge in residential rentals, Australia’s inflation seems to have reached its peak and is expected to rapidly recede. And that’s evidenced by the June figures just out, showing that inflation has fallen from 7% to 6% per annum, over the last quarter. [Read more…]
CONCERN OVER HIGH INFLATION is what is causing the RBA to continue raising interest rates.
So the real question is … will the latest Budget be responsible for adding to inflationary pressures?
Anyway, let’s quickly pick apart the critical issues of the latest Budget – as far as they relate to Commercial property. [Read more…]
AUSTRALIA HAS ALWAYS BOASTED a solid immigration rate – to the point, where about 30% of our population has actually been born outside the country.
During the pandemic, immigration numbers fell dramatically. As a result, vital skills shortages emerged among building & construction, hospitality and rural workers.
Over the years, the best-performing countries (where Australia stands out) were generally resource-rich, new-world countries with strong population growth and good record with corporate governance.
The Productivity Commission recently estimated immigration contributed almost 20% of the improvement in GDP per capita over the past 40 years.
Mistakenly, there are some who fear immigration will adversely affect employment levels – by taking jobs from existing workers. Instead, it’s been proven that immigration delivers broad-based improvements in productivity, across all levels of society.
Ultimately, these newcomers bring diversified skills to the workforce, which helps grow the total pie and everyone benefits – by driving productivity and innovation.
With our current skill shortages, immigration has an important role to play – initially, by plugging the glaring gaps in our workforce. But more importantly, by creating growth and improvements well.
Australia has long benefited from the cultural richness and diversity that immigration has given the nation, but we sometimes forget the economic benefits.
Bottom Line: There is no doubt immigration has introduced cultural richness and diversity into our society. However, we should also be aware of the economic benefits across every sector of the market – including Commercial property.
Best wishes …
WITH A CLEARER OUTLOOK for interest rates, Commercial property is expected to bounce back in 2023. Particularly, with several pundits suggesting the RBA could well start to ease rates again later this year.
There will be some investors, who may initially take a cautious approach. [Read more…]
IF WORKING FROM HOME is so appealing, why are businesses and governments choosing to hold onto their office space – and in many cases, lease even more?
According to the Property Council of Australia, Melbourne’s CBD towers were only 12% occupied in December – but 88% leased. And Sydney’s CBD towers were 23% occupied, but 91% leased. [Read more…]
DESPITE THE RECENT new Omicron variant, consumer demand is surging against the backdrop of labour shortages, supply chain blockages and recent price increases.
All of this is causing confusion and some concern. And pundits around the world are detailing strong Inflationary pressure – which usually means interest rates are likely to increase, sooner rather than later. [Read more…]
BEFORE THE PANDEMIC, there was a shortage of office space looming within the Sydney and Melbourne CBDs.
In fact, both were heading towards unhealthy vacancy levels of around 2% to 3%.
However, with extended lockdowns and some new supply coming onto the market … all that has clearly changed. [Read more…]
LEAVING ASIDE the effect of Covid has had on the general economy, the consequent drop in population growth and immigration will have a lasting impact upon … [Read more…]
IF YOU REMEMBER back to last May and June of last year, I explained that the economic decline caused by COVID was quite different from any other recessions.
What we experienced was a Medical Crisis with economic implications. As opposed to a total collapse of the Financial System – as you experienced during the GFC. [Read more…]
YOU MAY RECALL back in May and July, I foreshadowed a quick recovery would occur – as soon as we emerged from lockdown.
You see, what we’ve just been through, is a medical crisis with financial implications. NOT a total financial collapse – like we had during the GFC.
As such, “Demand” didn’t disappear … it simply got deferred. And you’ve already observed that with consumers now engaging in “Retail revenge” – as depicted in the graphic below (AFR, front page: 3 Dec 2020).
During the pandemic my clients seemed to fall into two camps:
Already you are seeing eager buyers re-entering the property market (both residential and commercial) – with prices on the rise once more.
Therefore, those who did buy during the pandemic are now having their faith vindicated. And now, the strength of this renewed demand is bringing more properties onto the market.
Not all the properties coming onto the market during November & December can be absorbed before Christmas.
Naturally, this will make those vendors somewhat unsettled – because the commercial market doesn’t officially reopen again until February/March.
So, if you are cashed up and able to move quickly … there should be a number of good choices for you early in the New Year.
Bottom Line: What I’m planning to do is compile a list of those unsold properties for my clients. And then, we’ll quietly sift through these opportunities together – to help clients secure several genuine bargains.
If that could be of interest to you … just let me know.
RIGHT NOW everyone is rather confused because of COVID. And what I generally find is that when investors are confused … they tend to do nothing.
Yet despite the dire predictions of market collapses, that’s NOT what has occurred. Sure, the share market has been rather volatile. However, the property market has basically held up well. [Read more…]
