2020 is set to be an exciting year on the commercial property front. For the last five years, industrial and commercial real estate has achieved double-digit capital growth. 2020 is set to make it six years in a row. Foreign investment has helped boost investment market-wide creating a recording breaking year for commercial real estate.
In the last five years, Sydney and Melbourne have been the biggest areas for commercial property growth. That’s set to change in 2020, experts believe growth to be more even across the country.
E-commerce has had a strong hand in driving lower vacancy rates, particularly across Brisbane, Melbourne, and Sydney.
In Melbourne, there are tighter conditions, which have resulted in a low vacancy rate. The CBD vacancy rate sits at just 3.3%. The strong growth in office rental over the last few years has seen a 26% rise in rent, which is promising for anyone interested in investing in commercial property.
Here’s what we can expect in the coming year.
- Economic growth will be slow in 2020, but it should improve
- Interest rates to dip further
- Yields on office property will tighten
- The industrial sector expects strong capital inflows
- In the office market, rents will grow at an even pace
- Capital growth will pick back up in 2020
- Investment activity to increase due to lower interest rates
- Demand for commercial property to increase
- Demand of owner-occupiers to increase
We have a busy year ahead, so it’s going to be interesting to see where 2020 takes us.