Melbourne’s housing market be in the middle of a correction phase but commercial property in the city shows no such signs of slowing down.
Thanks largely to the development in Docklands, Melbourne’s commercial property market has added around 120,000 square metres of new office space each year for the last ten years.
In a good sign for the new supply is the fact that it is recording solid absorption rates, the best in the country for the last three years in fact.
As a result our city has the lowest office vacancy rate of all of the nation’s capital city CBDs, sitting at 3.2 per cent.
But it’s not just office space showing strong results, with the industrial property sector also travelling well as it is buoyed by the state’s robust economy.
The Victorian Government’s infrastructure projects including the airport rail link, suburban rail loop and level crossing removals are driving the sector and demand for industrial property.
There’s also motorway upgrade projects that have started construction around the city that are designed to improve traffic congestion.
Industrial property capital values in Melbourne surged by 20 per cent over the last three years or so.
The supply shortage of commercial and industrial property is not reflected in the commercial hotel sector, which is set to open a bunch of new properties in Victoria.
Hotel occupancy rates for 2018 were sitting at around 85 per cent according to Colliers International figures.
Across all sectors there is certainly plenty happening in the commercial property space in Melbourne right now.
