Sentiment in Australian commercial property markets has turned positive for the first time in more than three years, according to the NAB’s Quarterly Australian Commercial Property Survey.
The Commercial Property Index rose to +2 points in Q3, its first positive read since March 2011.
Alan Oster, NAB Group Chief Economist, says the overall index improved but the picture was mixed across the country.
Sentiment in WA fell to an all time low (and weakened in SA/NT), with the longer-term outlook in WA also deteriorating further.
All other states saw an improvement with NSW the strongest and most optimistic state.
Overall market sentiment improved in all sectors, led by CBD hotels.
Retail sentiment turned positive for the first time since late-2010, underpinned by stronger market conditions in Victoria and NSW.
“Office market sentiment also improved in Q3, but continued to under-perform the broader market, especially in WA where large falls in capital values and rents were reported as downsizing continued in the resources and resources-related sectors,” says Oster.
A key result from the survey was the persistence of difficult leasing market conditions in all markets.
“Average rents continued to fall in all markets, but at slower rates, as leasing incentives and vacancy rates climbed, especially in the national office market,”says Oster.