Because Australia is relatively insulated from the global financial turmoil, and its economy comparatively more resilient than other developed nations, analysts predict a steady recovery by 2010. The main
Sydney commercial property sectors include:
1. Sydney commercial offices
In light of unemployment rates and the economic downturn, Sydney CBD office vacancies have inevitably risen. However, analysts at ANZ say that further significant rises are unlikely, with vacancy rates predicted to peak at 11% by the end of 2010, before stabilising by 2011- 2012. This is a stark contrast to the 1990s recession which saw an office vacancy rate of 23%. According to the Property Council of Australia, total vacancy rate of Sydney commercial offices was 7.7% in July, just above the national average of 7.3%.
2. Sydney commercial retail property
Over the months of June and July, consumer confidence has improved due to stimulus packages and lower interest rates - directly boosting the Sydney retail property sector. Analysts have also noticed a rise in short term leasing, with many tenants preferring flexibility due to market uncertainty. Rental prices have also dropped to accommodate tenants.
Due to increasing vacancy rates, decreasing rental prices and the difficulty for many to access credit, will draw some setbacks in the
Sydney commercial property market. But in effect, analysts believe Australia has survived the worst of the financial crisis, which means Sydney commercial property is also set to improve, albeit conservatively.
