Facing many setbacks from the COVID-19 pandemic, the Australian commercial property market somewhat showed some positive trends in Q1 of 2022[1]. Office and industrial sectors foresaw the importance of new office spaces and the need to hire more employees following the ease of COVID restrictions.
As the remote work mandate was lifted across the country, investors grew hungry to find better and more suited office spaces for their operations. This demonstrated a healthy flow of capital into the commercial real estate market throughout the first quarter of 2022.
As we approach the fall of 2022, the interest rates will be higher, and so is inflation [2]. How will commercial real estate respond to such alarming issues? If you are a buyer, seller, or investor of any kind, you will want to access the impact of rising inflation and interest rates on commercial real estate property; are there any positive sides to it, or just are the bearer of bad news?
Investing in Commercial Real Estate in 2023
Commercial real estate in Australia, especially commercial real estate in Melbourne and across other major cities, is always topical to local and foreign investors. If you are considering a possible real estate transaction right now, you will want to have a clear assessment of how commercial real estate in Melbourne and other big cities is going to be in 2023.
With the constantly growing inflation, banks are bound to throw higher interest rates on bank loans to curb inflation. This creates an unwelcoming scenario for businesses or individuals in pursuit of commercial real estate loans. Furthermore, rising inflation means an increase in construction costs that will escalate the cost of commercial properties to new heights.
Higher interest rates mean a loanee has higher loan repayments and will be reluctant to apply for a mortgage. This will reduce the number of buyers in the current market, which means less competition. This constricts the population of potential buyers in the commercial real estate market. Those with robust finances will be the only ones pulling the strings in the market when interest rates are higher.
If you have adequate cash flow to invest in commercial properties right now, this can be the right time for you to enter the market and find the best deals upfront. Commercial real estate in Windsor and Caulfield are two of Melbourne’s growing commercial centres. There are high chances of finding the right commercial property for your office spaces in those cities. You can find the best deal on commercial real estate in Caulfield and Windsor with Axis Property.
One more considerable impact of higher interest rates, which is the current scenario in Australia, through less interested parties in the market is a drop in property prices. Fewer buyers imply an oversupply of commercial properties in the market, and when supply is high, the price will move ahead in the counter direction.
A period of over-supply of commercial properties will give new investors a chance to grab desired property for a relatively lower price before the market sets course towards correction. If you are in correlation with an experienced property management agency, the year 2023 sure can land you the best deals on the commercial real estate market.
Owing to several factors; key market drivers, the commercial property market is one of Australia’s financial hubs in constant influx. Market drivers such as supply and demand, interest rates, population density, and economic state come into play when accessing (based on data) the market.
If you are a commercial real estate investor, you must have a keen eye on these subjects before making a play. Axis Property makes it easy for every client to manoeuvre speed bumps in their journey through Melbourne’s commercial real estate market.
Axis Property is a leading property management agency in Melbourne that handles hundreds of commercial properties inside this beautiful metropolis and its suburbs. All you need to do is to list your commercial real estate with Axis Property and acquire reliable services related to commercial property management in Melbourne and its suburbs like Caulfield and Windsor.
Find the best deals on commercial properties in Melbourne, Windsor, and Caulfield with Axis Property. Windsor and Caulfield are two of Melbourne’s fastest-growing commercial hubs boosting hot properties for investors to buy or lease. This can be your opportunity to strengthen your commercial real estate portfolio with the best deals in the market right now.