Commercial property

Commercial real estate settlements jumped last year

According to new data, the volume of commercial property settlements has increased by 60% on Australia’s east coast.

The latest report from PEXA Insights shows that NSW recorded 61% growth in the value of settled sales and a 13% growth in the number of commercial sales, bringing the total value of settled commercial properties to $39.6 billion l last year, more than any other state. .

Victoria recorded over 13,600 commercial sales settlements in FY21/22, with a total value of settled commercial assets of $34 billion, an increase of 50.3%.

Queensland saw the strongest growth in volume (57.5%) and overall value (108.5%), with the total value of settled commercial properties reaching $24.2 billion.

Victoria has led the country in commercial property transactions for the past two years, although New South Wales continues to have a higher value of settled transactions.

Source: PEXA

PEXA’s head of research, Mike Gill, said it was a record time for transactions in all areas of real estate.

“Due to an extremely strong first half, we recorded a 12-month record for residential and commercial sales settlements, both volume and value, on Australia’s east coast,” said Mr. .Gills.

Despite the good results, there are clear signs that the market has peaked, with a weaker second half of the financial year having been observed, according to Mr Gill.

Commercial sales settlements fell across the board in the second half of the financial year, with New South Wales (down 17.3%) and Victoria (down 14.7%) recording the most sharp drops in volume.

All Eastern states saw declines in the overall value of commercial sale settlements in the second half of FY22, with Queensland’s commercial transaction value falling the most during the period, falling 28, 6%.

Source: PEXA

The residential market also saw strong growth over the past fiscal year, with 628,000 settlements for the sale of residential properties completed, with a total value of $554 billion.

The country’s most populous states, Queensland, New South Wales and Victoria, all saw annual growth in the volume of property sales settlements, with Queensland leading the way with 220,692 residential settlements, up by nearly 12% compared to fiscal year 21.

New South Wales posted the highest overall residential settlement value of the three states for the second consecutive year, recording 206,052 settlements (up 1.5% year-on-year) worth 238.5 billion dollars (up 29% year-on-year). ).

Victoria recorded 201,361 residential property sales settlements (up 8.6% year-on-year) worth over $167 billion (up 35% year-on-year).

“The Queensland residential property market continued the strong momentum it has shown over the past few years, recording the highest number of sales settlements of any state in FY22, and markets New South Wales and Victoria showed great momentum to post record numbers in FY22 as well,” Mr Gill said. said.

All three states saw a notable drop in sales settlements from the first to second half of the fiscal year, coinciding with the Reserve Bank of Australia’s decision to raise the official exchange rate, according to Gill.

“Over the past few months in particular, coinciding with rising interest rates, we have seen the residential real estate market soften slightly, after a period of significant growth and annual records,” he said. .

Source: PEXA