July 27th REA Insights Weekly Commercial Search Report, 2020

After lifting the week before last, searches for properties for purchase and rent on realcommercial.com.au declined last week.

The number of searches for commercial properties for sale fell by -1.3 per cent last week and are now -4.4 per cent lower than their recent peak.

Despite the recent declines in for sale search volumes, activity remain 8.9 per cent higher than a year ago.

The largest weekly falls in commercial property searches last week were recorded in Australian Capital Territory (-6.8%), Tasmania (-5.8%) and Victoria (-5.0%), while search volumes rose in Queensland (2.2%), South Australia (0.9%), Western Australia (2.1%) and Northern Territory (6.2%).

From their peak, for sale search volumes have declined by more than 20 per cent in Tasmania (-28.4%), Northern Territory (-32.4%) and Australian Capital Territory (-28.2%) and the smallest overall falls have occurred in South Australia (-3.7%) and Queensland  (-4.1%).

Lease search volumes also fell over the past week, declining by -2.2 per cent and taking them -12.3 per cent lower than their peak.

Queensland (1.1%), Northern Territory (22.4%) and Australian Capital Territory (1.8%) were the only states in which lease search volumes rose last week, while Western Australia (-5.2%) and Vic (-4.5%) experience the largest declines.

Tasmania (-2.2%) and Queensland (-6.5%) have experienced the smallest overall declines in weekly lease search volumes and Northern Territory (-25.2%) and Victoria (-20.1%) have recorded the largest falls.

Although there has been recent weakness in lease search volumes, they remain 14.6 per cent higher than a year ago.

Tasmania (34.2%) and Northern Territory (25.0%) have recorded the largest increases in lease search volumes over the year with the smallest increases recorded in Victoria (4.6%) and Australian Capital Territory (5.6%).

While commercial search volumes continue to ease, I still expect that over the medium term there is likely to be a rebound as businesses of all shapes and sizes consider what their future tenancy requirements look like in a post-COVID world.

Rental moratoriums which are currently in place, the lockdowns in Melbourne and the fact many are yet to return to offices elsewhere is probably impacting on search. Longer term I believe accommodation costs will be a big focus for businesses, which should lead to increased commercial search volumes.