QLD MARKET OVERVIEW
QUEENSLAND
QLD Market Overview with Dan Dwan
Reflecting on the last 6 months, what were some of the prevailing trends that you noticed and how did they play out in the market? Over the last 6 months some prevailing trends have emerged in the market. Firstly, there is continually less stock available on the market. Cheap money, coupled with lower costs of debt and increased interest rates, have seen buyers who wish to purchase property shift towards leasing due to the shortage of properties available and the cost of acquiring those properties. That, in turn, has created uplift in leasing activity across all sectors including retail, industrial and commercial, as buyers look to more modern premises. As a result, buyers are progressing down the path of leasing. Activity in relation to tenanted investments remains strong. Toowoomba is a vibrant community and appeals to investors due to the diversity of its economy. This appeal is highlighted by the fact that despite experiencing a slight softening of yields, it has not been inline with the interest rate increases; this is likely the result of buyers in the sub $5 million to $6 million dollar price point. Marketwise, what are you forecasting for the second half of 2023 and how will increased lending costs impact the various markets? It is expected that the trend of buyers moving towards leasing property as opposed to buying will continue into the backend of 2023, particularly around the industrial sector as the shortage of stock outside of Toowoomba will drive investors into this market. There is increased activity in all sectors, including industrial, office and retail due to this trend. However, as Toowoomba is coming off a flat-out leasing period, landlords and owners are still offering high levels of incentives to attract the right tenants. What market sectors do you anticipate being most in demand over the next six months? The two primary markets will be the industrial market and the residential market. The industrial market has experienced high-level increases in leasing rates across South East Queensland. This increase, combined with a shortage of quality industrial stock, is generating increased activity in and around Toowoomba due to potential availability of stock and an appealing leasing rate which is expected to increase. The residential market is extremely strong off the back of covid increases. However, there is a shortage of available land to develop and to match the demand. This demand is expected to continue due to the influx of people moving to Toowoomba for lifestyle, health, education or business opportunities; it is expected these opportunities will have a favourable impact on the
DAN DWAN Managing Director Colliers Toowoomba
58 – July / August 2023
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