Australian Real estate landscape in 2024

In Insights

Offices space has seemingly never recovered to its pre-Covid status quo. People welcomed flexible working arrangements which saw Corporate Australia a casualty of change. World wide we have seen prices tumbling with our major CBD’s seeing a significant decline in value no more so than Melbourne.

One thing that simply can’t be ignored is what the impact of the potential collapse of the US commercial property market have? Australian pension funds and institutional investors are heavily exposed to international markets particularly in the US. If there is a collapse in the US commercial office property market this will take banks and financial institutes with it. The domino effect would be exceptionally detrimental on Australia pensions and investors. Lets hope that the current trend of turning a blind eye to this situation by the “pretend & extend” method works out.

Retail’s still a bit all over the place. While convenience stores and supermarkets are holding steady, traditional retail spaces are grappling with changing shopping habits even though shopping centre foot traffic is increasing with consumerism becoming a $425bn national hobby.

Warehouses and distribution centres are the stars here. With e-commerce booming and supply chains evolving, industrial properties are in high demand, especially in key logistics hubs.

House Prices – prices keep climbing, especially in the big cities. Pent-up demand is keeping the fire burning. The Gold Coast housing market is a fine example of this. Demand remains extremely strong driven by lifestyle appeal and a surge in interstate and international migration. Buyers are competing fiercely for properties, particularly in sought-after coastal and hinterland areas. Vendors are not selling because they cannot buy or rent whilst they look to buy. Renters cannot rent because of undersupply and rapidly increasing rents. It is not uncommon for quasi auctions to take place on the door step in order to secure a home and in some cases 12 months rent being offered in advance.

Green is the new gold. Sustainable properties are all the rage, with tenants and investors alike prioritising eco-friendly features and energy efficiency.

Construction across Australia has become a bit of a sore subject of late. With building companies and developers going bust, we are entering a time where the demand for new is on the rise but the capability to fulfil those needs is going down. Of the builders that have made it through the storm, many are simply too busy or just not big enough to take on the size of projects around.