REA Insights Commercial Property Snapshot, October 2020
Despite the ongoing pandemic, interest in commercial property remains stronger than last year, with new data pointing to heightened activity on both the ‘Buy’ and ‘Lease’ sections of realcommercial.com.au in September.
Victoria also saw some green shoots, with lease searches rebounding over the month as businesses seemingly prepare for the ease of restrictions (hopefully) in the near future.
But in an economic climate characterised by uncertainty, will this activity translate into actual sales and new leases signed? It remains too early to be seen. Next month’s snapshot will be quite telling as we’ll have a view on how the Federal Budget announcements at the start of October landed with commercial property owners and seekers.
In this month’s commercial snapshot, we continue to track search volumes over time and demand by category. We also provide a view of user behaviour by analysing the most-searched keywords per asset class as well as looking at the most popular commercial property listings for the month.
How are search volumes tracking?
National buyer search volumes are up 21 per cent year-on-year.
The volume of buyer searches has been fairly steady over the past five months, though September did see a slide of 1 per cent month-on-month brought on by a mixed performance across the states.
Compared to August, demand to buy commercial property decreased across multiple states, most notably in Victoria (-4%), Queensland (-3%) and New South Wales (-2%).
However, Tasmania recorded a substantial 7 per cent month-on-month increase and Northern Territory hit a record high.
National searches for commercial property to lease have started to recover, with a 3 per cent increase compared to the previous month.
Despite a month-on-month increase in all states bar Western Australia, the national increase was predominantly driven by Victoria, which was up 12 per cent on August
Year-on-year lease search volumes have increased by 32 per cent in Queensland, 33 per cent in Western Australia, 34 per cent in South Australia, 42 per cent in Northern Territory and 47 per cent in Tasmania.
All categories of property on realcommercial.com.au have recored year-on-year growth in searches.
What are people and businesses looking to buy?
Views per listing on the ‘Buy’ section increased by 0.4 per cent in September.
The category that clocked the largest month-on-month increase in views per listing was showrooms – up 6 per cent on August and 26 per cent year-on-year. This can mainly attributed to the growth seen in Queensland and Western Australia, which recorded 61 per cent and 59 per cent year-on-year growth respectively.
We also witnessed a modest increase in demand for hotel/leisure listings. While Queensland and Tasmania drove the month-on-month increase in demand for this category, most likely from the focus on intrastate tourism, Victoria actually clocked the highest year-on-year increase of 48 per cent.
What are people and businesses looking to lease?
The large increase in leasehold vacancies has been well documented, especially in city centres due to restricted travel and many professionals still working remotely. Despite an increase in amount of stock available, the lease sector has seen substantial year-on-year growth in views per listing across all categories.
Retail has recorded a month-on-month increase of 4 per cent and year-on-year change of 36 per cent.
Interest in leasing showrooms increased by 6 per cent month-on-month and 29 per cent year-on-year – driven primarily by Canberra, which recorded a 115 per cent year-on-year growth in views per listing.
Contrary to the growth seen in ‘for sale’ hotel/leisure demand, the lease sector for the same category saw a month-on-month decline of 3 per cent, suggesting that property seekers may potentially be shifting away from leasing, to buying such properties. It will be interesting to see whether this trend continues next month.
What are some features that people and businesses are looking for?
Above we look at the most-used keywords for commercial property seekers over the past six months.
For land/development sites, having a hardstand area was the most important feature when buying or leasing a property in that asset class.
The third-most searched keyword for office listings was ‘residential’, perhaps hinting that commercial property buyers and renters are looking for multi-purpose properties.
For those searching for medical/consulting listings, childcares and massage centres trump dental clinics and pharmacies.
What have been the most popular commercial listings?
See the top 10 most viewed commercial listings nationally and in each state below.
A mixed-use retail complex in Mermaid Beach, Queensland was the most-viewed commercial listing on realcommercial.com.au in September 2020.