As you can see from the graph, Sydney’s vacancy rate actually increased from 8.3% to 9.3% during the six months to July 2011.
For the remainder of Australia’s office markets, there was an overall improvement — as demand for space exceeded supply, and yields began to firm.
According to Peter Verwer (PCA’s chief executive): “This is a good result, especially now with a lot of uncertainty about Australia’s economic resilience … demand and absorption are well above the historical average, except for the orphan Sydney.”
Furthermore, because of Sydney’s heavy dependence upon the financial sector … this growth trend is unlikely to change any time soon.
Melbourne, on the other hand, has its Office demand spread across a wide number of sectors. And therefore, has been far less exposed to the recent global turmoil.
Bottom Line: Despite all the stock market gloom, the underlying fundamentals for Commercial property are strong — particularly in Melbourne.
And historically, it is in times like these when shrewd investors have laid the foundation for their extraordinary fortunes in Commercial property.