NSW MARKET OVERVIEW
NEW SOUTH WALES
NSW Market Overview with Joseph Assaf Reflecting on Qrt 1 2023, what were some of the prevailing trends that you noticed and how did they play out in the market?
Market-wise, what are you forecasting in the second half of 2023 and how will increased lending costs impact the various markets? We find ourselves contemplating the implications of rising lending costs across various markets. It’s no secret that these increases may impose a substantial impact on the valuations and book value of assets, we are currently witnessing an increase in mortgagee in possession appraisals and sales. However, even amidst these fluctuations, we have observed that the overall demand for sought-after assets including childcare, industrial and income producing assets remains highly sought after. This reinforces our belief that the strategic positioning of assets, along with their inherent potential for growth, will continue to fuel a consistent volume of transactions. In the face of global economic uncertainty, Australia’s stability stands in stark contrast to other international investment destinations, a fact that bolsters our optimism. While the rising lending costs and inflation undeniably influence buyer decisions across all asset classes, the Australian real estate market’s resilience is a testament to its robustness. What market sectors do you anticipate being most in demand over the next six months? In the next six months, we foresee strong demand for income-generating assets with significant existing improvements. This trend is driven by heightened construction costs, which have indirectly increased the value of all existing structures. Rather than categorizing by asset class,
As we look back on the first quarter of 2023, it’s clear that our market landscape was shaped by several distinct trends. Interest rate rises and inflation have been at the forefront of discussions, affecting both the vendors and purchasers of recent transactions. These factors have led to an increase in extended settlement terms, reflecting a shift in negotiation dynamics and varying deal structures. Investment assets that provide an income stream have gained traction in the market. Buyers are actively seeking opportunities to add value or reposition assets to increase rents. With funding becoming more limited, buyers are now presented with an array of choices, which is why our role as agents has never been more crucial. We’ve been dedicated to working closely with each individual buyer, ensuring they understand the nature of every campaign and transaction we oversee, empowering them to make informed decisions. Simultaneously, we’ve been navigating genuine concerns surrounding the office market. Uncertainties about its future have been a common concern, further influenced by high vacancy rates and incentives. As we continue to monitor these trends and how they develop, we’ll keep striving to provide the utmost value and insight to our clients. The landscape may be evolving, but our commitment to providing exceptional service remains steadfast.
JOSEPH ASSAF Director Ray White Commercial Western Sydney
20 – July / August 2023
Powered by FlippingBook