We hope the New Year has started well for you all. The long hot summer has been a welcome relief after such a wet 2023. With that comes positivity. Talking around the various businesses we deal with it appears that customer procrastination is over, and people are back making decisions and doing things. In November we highlighted a post-election lift in optimism, and it appears the honeymoon is still going.
While we have not seen any immediate changes in the performance metrics there is a genuine belief that 2024 will be better than recent years. The softer than expected inflation data is good news and the easing of the labour market is great for businesses looking to make recruitment decisions.
Commercial activity has also started positively, led principally by leasing. There is activity across our office in all three sectors: warehouse, office and retail. Viewing activity is up and with that leasing transactions flow. Industrial stock remains tight to the point where we are experiencing leasing offers in competition. This bodes very well for rental rate stability and even ongoing incremental growth.
On the sales front owner-occupiers remain our strongest buyer group, further enhancing the argument that existing buildings represent significantly better perceived value. Evidence suggests that new building costs have not really come off and there is talk that development contributions are under serious upward pressure for the next rating year given the issues we have with old and undermaintained infrastructure. The investment sector continues to be strongly influenced by interest rates both from a cost of funds and from a deposit return perspective.
There appears to be more properties coming to market. This will create an opportunity for buyers from both of these groups who are prepared to take a longer term view, to acquire properties now which will likely represent great value when we reflect back in a few years’ time.
The residential market is stable in terms of volume when looking at year-on-year comparisons and while the median price for January was down it is symptomatic of a much lower transactional month and the continued activity in that first home buyer market. Investors are also re-entering the market, essential to alleviating pressure in a hugely tight rental market.
As always we would welcome the chance to hear from you if you have any selling, buying, leasing or body corporate management requirements. Simply contact one of your preferred agents.