August 3rd REA Insights Weekly Commercial Search Report, 2020

Commercial search volumes fell again last week, but the rate of decline is slowing.

The number of searches for commercial properties for sale on realcommercial.com.au fell by -0.2 per cent last week and is now -5.8 per cent lower than the recent peak.

For sale search volumes fell last week in Victoria (-2.0%), Queensland (-2.5%), South Australia (-0.4%) and Northern Territory (-2.6%).

However, it was a different in the Australian Capital Territory and New South Wales where searches grew 4 per cent and 3.4 per cent respectively.

For sale search volumes are now below their peak across all states and territories, with the smallest falls having been recorded in South Australia (-4.1%) and Western Australia (-5.6%) and the largest in Northern Territory (-34.2%) and Tasmania (-28.2%).

Despite the recent weakness in search volumes, last week there were 9.5 per cent more searches for commercial properties for sale than there were at the same time last year.

Although nationally for sale search volumes are higher year-on-year, they are lower in Tasmania (-15.7%) and largely unchanged in Northern Territory (1.1%) while the largest increases have been recorded in South Australia (35.4%) and Australian Capital Territory (27.4%).

Lease search volumes fell by -0.6 per cent last week, their fifth weekly fall out of the past six weeks. Search volumes are now -12.9 per cent lower than their peak.

Lease search volumes recorded their largest weekly increases last week in Australian Capital Territory (22.5%) and New South Wales (4.1%) while volumes fell in Victoria (-2.8%), Queensland (-4.8%), South Australia (-3.0%), Western Australia (-1.6%) and Tasmania (-9.5%).

The largest declines in lease search volumes have been recorded in Northern Territory (-22.8%) and Victoria (-22.3%) while Australian Capital Territory (-6.0%) and Queensland (-11.0%) have experienced the smallest declines.

While lease search volumes have fallen in recent weeks, they are still 14.4 per cent higher than this time lastyear.

The smallest year-on-year increase in lease search volumes were recorded in Victoria (3.8%) and South Australia (9.5%) and the largest increases were in Australian Capital Territory (17.5%) and New South Wales (16.3%).

With consumer confidence nationally continuing to slide and Melbourne now re-entering lockdown I expect that businesses are likely to refocus their attention to cost control. Accommodation costs are a large proportion of business costs and are also one that is controllable. Given this I would expect that over the coming period search volumes will eventually begin to rise as businesses start getting more serious about cost-cutting and the reality that many businesses will have fewer employees in the office each day.