The outlook for Australia’s commercial property sector hasn’t been this good for the past four years.
That’s the finding from the latest NAB Australian commercial property survey released on Thursday, with its index rising six points to +4 in the March quarter.
Here’s the NAB:
“Positive signs emerge as NAB’s Commercial Property Index climbs to a 4-year high. But confidence continues to vary significantly across states and by market sector.
NSW and Victoria are by far the most optimistic states for commercial property and WA is the least optimistic by some margin. By sector, confidence is strongest in CBD hotels followed by industrial and weakest but improving in office.
There was a notable pick up in confidence among property developers, with more than 1 in 2 planning to start new works in the short-term. Property firms now see consumer confidence as the biggest challenge facing their business, but the level of concern over stock availability, government regulation and red tape have all fallen”.
Clearly booming residential property markets in NSW and Victoria, along with the lower commodity prices, are having an impact on sentiment across the country.
“Positive sentiment in NSW and Victoria was offset by sharply weaker sentiment in WA and to a lesser extent in Queensland and SA/NT. Property professionals in NSW and Victoria were also the most confident looking forward, while those in WA are by far the most pessimistic”.
While it’s uneven in nature — both by sector and location — with concerns surrounding stock availability, government regulation and red tape remaining, on this evidence, buoyant conditions in the residential property sector finally appear to be spilling over into the commercial space after many years of subdued activity.