Lack of Construction Underpins
Demand for Office Space

Available Full CBD Office Floors are quickly vanishingThe Commercial property market is driven mainly by supply and demand — especially Offices.

And therefore, with …

  • falling vacancies,
  • positive net absorption and
  • few new projects in the pipeline …

… this means a looming shortage of Office space around Australia — with rentals poised to rise sharply. [Read more…]

Will the RBA Cut Rates Again?

 This may well be the last Interest Rate Cut
Last week’s inflation figures were certainly much better than expected.

As such, there had been considerable political pressure placed on the RBA from by the government to cut interest rates this week.

Retailers were virtually pleading with the RBA to do so. Plus, homeowners were also looking for some relief in the run up to Christmas.

However, this is probably the last interest rate cut by the RBA for quite some time. To understand why, you need to cast your mind back to when the GFC began in 2008.

RBA has a real Dilemma going forwardAt the time, business investment was falling.

This is unlikely to occur from now on — because planned mining investment (at $430 billion) is three times greater than in 2008, representing about a third of Australian’s GDP.

And overall, Australia is said to have around $900 billion of business investment in the pipeline.

Furthermore, our main trading partner (China) is now far less dependent upon Western countries for its growth.

In 2008, China’s 12% per annum growth in GDP reflected a 3% to 4% component of exports to the West. While this year’s 9.5% growth in GDP was basically driven by domestic demand — with virtually no exports involved.

Overall, there is said to be around $900 billion of business investment in the pipeline. Add to that the improved stability of Australian banks, with their reduced offshore exposure and improved domestic deposits. Plus, an increase in the Tier 1 capital ratios.

Finally you also need to remember the RBA’s cash rate has now fallen from 7.25% in 2008 to its current level of 4.5% today.

Bottom Line: Apart from the current turmoil in Europe, Australia’s underlying fundamentals are solid. And these augur well for strong growth in Commercial property over the next 5 years.

To reduce interest rates any further would only serve to artificially inflate asset prices — rather than allow the market to grow organically … based upon genuine, sustainable demand.

 

Not all Repairs to Commercial Property are Automatically Deductible!

Claiming Repairs for Commercial property needs careful thought
Did you realise that some of the repairs you make to your Commercial property are NOT necessarily deductible against your rental income?

Often, it comes down to something as simple as timing. [Read more…]

The 9 Benefits You Can Gain …
From Investing in Commercial Property

There are numerous Benefits of owning Commercial property
One of the main attractions of investing in Commercial Property is its security.

Unlike residential property … Commercial Property is generally still there performing for you, if the economy does slow down.

However, when the economy is strong, Commercial Property grows in value and provides you with a steady income.

Anyway, for those of you starting out … here’s a list of the benefits you’ll enjoy from successful Commercial property investing. [Read more…]

Commercial Property: 5 Key Things to Consider

Location, Position, Where it ...Commercial property does require a little more thought than Residential property. But the rewards are solid; and generally, more predictable.

Simply keep these 5 aspects in mind, when it comes to choosing Commercial property. [Read more…]

Retailing Isn’t Totally Dead …
It Has Simply Changed

The Winery by Gazebo an Crown Street, Surry HillsIn last week’s article, you read a general overview of the Retail sector … and some of the issues currently confronting traders.

Let’s now take a quick look at three of the capital cities. [Read more…]

Commercial Property: 6 More Tips For Investing with a Private Syndicate

Syndication can multiply your Equity, and help Minimise your RisksSeveral weeks ago, you began learning about how to buy Commercial property using a Private Syndicate.

Continuing on from that, here are your final six tips for success …

  • Price range
  • Required Lease Terms
  • Due Diligence
  • Legal and Accounting Issues
  • Timing of Equity into the Syndicate
  • Initial Yield [Read more…]

Commercial Property & The Economy

The IMF has just given Australia the thumbs upLast week, to the IMF gave the Australian economy a positive report card — with a projected growth of 1.8% for 2011, and 3.3% for the ensuing 12 months.

Clearly there is international concern about the state of affairs within Europe and the US.

However, that belies the positive impact being provided by the rest of the world.

Although China’s growth is slowing, it still remains at a healthy 9% per annum; and India is not too far behind at 7.5% per annum.

When you add to that Latin America at 4%, and parts of Africa at close to 6% … you then start to see the northern Atlantic problems in some perspective. [Read more…]

Commercial Property: Should You Be Cautious
About Investing in the Retail Sector?

The Retail sector is very delicately balancedMany investors just simply fall in love with Retail property. And probably, because of familiarity — as it tends to influence so much of our daily lives.

Therefore, after investing in Residential property for a while, you find people will gravitate naturally towards Retail properly.

To them, it seems to be the next logical step. But is that actually the case? [Read more…]

Why the Slow Economic Recovery?

The Vagaries of Financial UncertaintyExactly why have industrial companies around the world been slow to recover? And why did everything look so promising … and then suddenly, seem to grind to a halt?

Perhaps some insight into this dilemma was provided by the IMF’s recent World Economic Outlook.

According to Oliver Blanchard (its chief economist), there are the dual influences of a slowdown in advanced Western economies; and the overall financial uncertainty.

During the GFC, companies allowed their inventories to run down. Then, with a hint of global recovery, those same companies began replacing their depleted inventory levels. [Read more…]

Commercial Property: Home-study Course
Now Taking Shape

My new Training Course is quickly taking shape
Yesterday, I gave my Inner Circle a “sneak peek” at the outline for my brand-new training Course … “Mastering Commercial Property”.

And over the past couple of weeks, I have actually progressed a fair way down the track, in bringing it all together.

However, I just wanted you to see the direction in which it was heading.

Therefore, you can take a look now at just how the website is taking shape. And please keep your feedback coming — because no it’s been just so helpful.