With the new financial year upon us, Sales & Leasing Executive Daniel Hutchinson takes a minute to reflect upon the year that was, and what you need to know for 2019/2020.
The 2018/19 FY has seen more than its fair share of ups and downs. 2019 kicked off with one of the busiest January-March periods we’ve seen in recent times. Typically, a slower period, phones were ringing off the hooks. The upcoming Federal election was prevalent in people’s minds as speculation grew around potential changes to negative gearing and capital gains tax. This created a flurry of activity in the sales market; as investors frantically tried to lock down properties before the federal election.
The early months of 2019 showed the commercial sector on track to recover from the depths of the GFC, the mining boom and the government downsizing in the CBD. Vacancies in the CBD were down 2% on the previous 6 months. The Hayne’s Royal Commission into Banking handed down their 76 recommendations. This didn’t cause the upset many expected, ultimately the intention was to address misconduct, not crash the economy. It did create some uncertainty in commercial leasing, as financial services make up 15% of the CBD market, however the commercial market is well on it’s way back to healthy vacancy levels.
The sales market across all sectors is currently buzzing with activity. The reserve bank in July further reduced the cash rate to 1%. Off the back of this yields may compress further, creating an even more competitive investment market as investors seek greater returns than what the banks can offer. Additionally owner occupiers are operating with full confidence in the market, with cash easily accessible, and borrowing cost so low purchasing is an attractive alternative to leasing.
Retail sales remain highly competitive for quality stock in key locations; however, it appears as though B & C stock is suffering the in the leasing market as it undergoes a correction; lessors are having to offer discounting and incentives to support new tenants.
Those with the foresight to landbank are set to further benefit as Metropolitan Queensland becomes increasing land poor, with values continuing to increase at a stable rate.
Brisbane is still a hive of activity with plenty of major projects in the works; we look forward to seeing the $1B upgrade to Eagle Street Pier on the Brisbane River, Scott Hutchinson’s 3,500 seat Festival Hall to aid and support local music and Brisbane Airports Auto Mall complete with 2.3km of purpose built race track.
Closer to home, FAL Property Group has set the bar high for the coming financial year, after achieving it’s best year for the number of successful sales transactions.
Happy new FY from the FAL team.