The Federal election, global uncertainty (through US and China Trade Wars, Brexit, Hong Kong riots) and the RBA’s decision to drop interest rates to the lowest in Australian History (0.75%) have all in some way, shape or form had an effect on Australia’s property market. 

Whilst all signs point to ‘doom and gloom’ for the Australian economy – property investment is shining out as the preferred investment asset class for 2020. 

When investors are looking to place capital, the volatile share market no longer holds its appeal. Gold is trading at record highs – leaving Australia Property (in particular – Sydney core assets) the preferred investment.

Domestic investors as well as foreign investors are (now more than ever) chasing secure and superior returns, supported by a cheap currency conversion

Over the course of the last 12 months, we found that the Sydney CBD was still the main focus for both local and offshore investors. 

We are seeing buyers foresee strong demand for commercial strata assets in the future, and are willing to pay a premium price now to secure them. 

This particular market has not seen the peaks and troughs that the media has been portraying. The tightly held nature of the Sydney CBD, along with market sentiment, are working together to create highly favourable conditions for commercial property owners. 

With office vacancies at a tight 3.7%, both CBD office and retail are remaining to be the preferred asset class supported by a chase for high quality, strong tenant demand and scarcity, as well as capital appreciation

Sales volumes over the last 12 months were above historical averages, driven by strong investor demand.

Throughout 2019, our team saw vacancy rates trended downwards across the CBD.

The sale of Shop 1, 37 York Street– a 14sq m* shop that achieved a close to Sydney CBD record building rate - within the first week alone, our team experienced record numbers of enquiries with a 27% increase in first week numbers

Offshore interest in core assets has been at levels our team have never seen before, with a strong interest from Vietnamese, Indonesian, Korean, Singaporean and Malaysian buyers. 

With only a small number of offerings being made available in the Core of the Sydney CBD, the undersupply of opportunity has led to an increase in demand from investors – looking for ‘blue chip, safe holdings.’

This was further compounded by our teams sale of 229 Macquarie Street – a small 5sq m* retail shop transacted for $921,000 to a first time offshore Asian investor, simply looking to ‘secure a slice’ of the Sydney CBD

We expect these positive market conditions to continue into 2020, with the ‘doom and gloom’ portrayed by the media no longer holding its relevance. 

So what’s next? 

With interest rates continuing to be at record low levels, and the possibility of them stooping lower – we are expecting 2020 to see even more of a spike that 2019 has seen. In particular, for the ‘attainable’ entry level market prices of strata office and retail, the Sydney CBD commercial market we feel, will have its best year yet. 

This combined with the removal of Sydney’s lock out laws as of 14 January, will undoubtedly ‘revitalise’ the Sydney CBD – increasing activity and pent up demand for property in the precinct. The already tightly held CBD is set to see increases at property values at the fastest rate in a decade. 

Current owners are in a great position with minimal stock on the market (given the tightly held nature of the CBD) and purchasers looking to acquire strata office and retail while money is ‘dirt cheap’.