Research on Commercial Real Estate of
ong>Researchong> on Commercial Real Estate of Melbourne Melissa Snow The University of Adelaide April 2018 Key terms: Commercial Property, Real Estate Current Trend, Interest rates, Introduction Melbourne often comes out tops on global liveability surveys – and it’s not hard to see why. With a bustling cosmopolitan atmosphere, a thriving arts scene and a welcoming cafe culture, Melbourne is beloved by locals and visitors alike. As the administrative, recreational, culture and business hub of Victoria, Melbourne is characterised by its unique network of innercity laneways, one of the world’s most extensive tram systems and the Yarra River. Add in the waterfront appeal of suburbs including St Kilda, Brighton, Elwood, Port Melbourne and Docklands and you’ve got a liveable mix that appeals to long-time residents and newcomers to Australia’s second-largest city. The city also has plenty to offer residents who like to get out and about – including green spaces, and designated walking and cycling paths. Local authorities, including Melbourne City Council, have also expressed an ongoing commitment to sustainability – identifying greenhouse gas reduction, reduced water consumption and sustainable building as key long-term priorities. Commercial property behaved mostly as expected in 2017. Yields continued to firm, tenants were back in the market and the office sector did particularly well, benefiting from business growth and, in the case of Sydney, withdrawal of stock. Meanwhile, Amazon finally made its relatively lacklustre entry into the Australian market One of the biggest changes we saw was the dramatic pullback of Chinese investors. After several years of big jumps in investment volumes, property is now on the Chinese Government’s restricted list. While some Chinese are still buying, it has suddenly become a lot harder for them to invest. The other big surprise was Frank Lowy selling Westfield, which is perhaps the strongest sign that the way we are shopping is fundamentally changing and the impacts on shopping centres will continue. Melbourne prices to fall in 2018 as housing market turns but a crash is ‘unlikely’.