There’s a mix of both bad and good news in the latest NAB Commercial Property Survey.
On the downside, Victoria’s office vacancy rate has more than doubled to 10.9% in Q2 from the 4% recorded at the end of March last year.
The vacancy rate is excepted to ease somewhat over the next two years, falling to 8.3% by June 2023.
Unsurprisingly, office rents are expected to fall – down 4.2% in the next 12 months and -1.9% in two years.
In contrast, industrial property is clearly having its moment in the sun. Vacancy rates in the “somewhat” undersupplied sector were 4.8% in Q2.
What’s more, under-supply is expected to remain a feature of the market in the next one- to five- years.
The outlook for rents is, therefore, positive – with rents in Victoria expected to grow by 2.0% in the next 12 months and 3.7% in two years (see image).
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