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Brisbane Commercial Property – Jan 2012 Review

3 February 2012

 

January is always a good time to reflect on the previous year and predict what you think will happen with the Brisbane Commercial Property market in the coming year. The property dooms day predictions have been proven wrong when looking back on a rollercoaster 2011. Predictions of a 60-90% drop in value were completely out of whack. Brisbane had a slide of just over 8%, an excellent result considering the initial fear in the market.

The outlook for commercial real estate in 2012 is a lot more positive & stable. Queensland hasn’t had the bad start to the year compared to 2011’s natural disasters, which really did knock the wind out of us. Consumer confidence is increasing locally, and so is the all important US consumer. Unemployment in the US is decreasing consistently. Asian economic growth forecasts are also positive. Australia more and more is influenced on what is happening with our closet neighbours.

As a commercial real estate agent, only three issues have me worried for the commercial property outlook for 2012: The European debt crisis; the strong Australian dollar and the Federal Governments spending spree.

The major elephant in the room is Europe’s debt crisis. No one can predict what is going to happen? France’s rapidly increasing debt is becoming a major concern. My feeling is there will be a tough resolution & Europe will stabilise. Europe regularly encounters dark times and comes out far stronger. The downside is Australian banks will find it hard to buy cheap money, which in turn will make it harder for people to obtain commercial property finance.

The other issue is our dollar. Great if you want to travel or purchase items from overseas. The reality is we rely on mining exports, tourism & manufacturing. The high dollar makes it hard for our trading partners to purchase Australian goods. Hopefully our dollar will drop below $0.90 US.

I was always taught never to discuss politics. All I’ll say is this government needs to channel most of its spending on nation building programs such as improved road, rail and regional airport networks. As the great politician Teddy Roosevelt said “if you build it, they will come”.

So what has been happening in both the national and Queensland commercial real estate market?

According to RP Data’s latest national commercial property auction results the clearance rate for the week ending 23 December 2011 was 20 precent. Over the four weeks to 23 December 2011 there were 128 successful auctions with around $145 million of stock changing hands*.

The recent sales summary for Queensland from July 2nd-January 27th 2012 (excluding auctions) equalled $2,098,003,000 in total. This accounted for 413 sales, of which 159 were industrial sales. The total for the industrial sales was $364,992,000*.

Bring on a more positive and fruitful 2012 for Commercial Property in Brisbane!

 

*RP Data 2012

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