Is 2024 Starting To Turn The Corner?

Say goodbye to 2023, which according to many commentators had the worst commercial sales in nearly 30 years.

Buyers were nervous with the cost of living and rising inflation, with high interest rates and an election season which seemed to occupy nearly 6 months of the year.

While inflation is slowly trending down, there is still significant uncertainty as to when the Official Cash Rate (OCR) will begin to track below 5%. Initial expectations aimed for a midyear adjustment, but it appears more likely to be in the last quarter of 2024.

With a low volume of sales for the last 18 months, data on value and returns is limited and the first question on a seller’s mind is “What is my property worth”? This is reflected in many properties being offered as “By Negotiation”, as vendors were uncertain as to meeting buyers expectations and sought to find the middle ground. Already this year we can see a change happening with prices being stated or asking for offers over a value.

Construction costs appear to have stabilised and with the prospect of lower interest rates coming, the new build option becomes more attractive.

As with any cycle, well designed properties in good locations have been in demand. However the challenge has been readying properties for sale or lease where factors such as location, design, layout, or value present questions for the purchaser.

Those in the market for a property may need to broaden their expectations to successfully navigate deals.