Lending conditions still choking growth

Written on the 1 February 2011

JULY 2010

A BRISBANE property acquisition specialist says the local commercial property market is picking up, but growth will likely be restricted in the next two years.

Corpacquire director David Taylor says the market is in a much stronger position than last year with an increased emphasis on transport nodes, but the banks are not keeping pace.

“2009 was a basket case that everybody accepted was too hard, it was dreadful for everyone, but the key difference in 2010 is that people have now got the attitude of ‘let’s get back to business’ and they want to be here for the long term,” he says.

“We’re getting back to developers wanting to create value, investors wanting to add value and people are looking to buy and sell.

“The dictating fact of the market place is that it relies on funding and debt is vital, but the difference is that the majority of banks are really only primary lenders, and mezzanine lenders don’t really exist, so commercial property relies on the big tier banks.”

Restricted lending has meant many developers are downplaying the features of projects in a bid to get enough presales, but this makes many developments unviable.

“Even without immigration, just with internal population growth, with the supply and demand equation developers will find themselves out of kilter,” he says.

“If it is picking up you’ve got to compare one base to another - volumes are probably 20 per cent of what the market was three years ago, and after last year there’s certainly an upturn and well-versed people are coming forward, but the banks need to come with them.

“South East Queensland has strong fundamentals going forward, retail is good, the council is encouraging density and transport hubs, and I think the industry has accepted that you need to be near transport nodes.”

Corpacquire is currently engaged in an inner-city residential acquisition drive and Taylor hints that a commercial acquisition round is coming soon.


Latest News

CSL'S PROFIT UPGRADE CAUSES SHARES TO SOAR

HEALTHCARE giant CSL Limited's (ASX: CSL) share price climbed 12.5 per cent after the company almost doubled i...

DATA#3 TRADES AT 12-MONTH HIGH AS PROFIT GROWS

DATA#3 expects net profit before tax to rise 30 per cent in the first half of FY17, meeting its guidance for the p...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CRITICS CALL FOR MORE INDEPENDENT DIRECTORS ON BLUE SKY BOARD

BLUE Sky Alternative Investments (ASX: BLA) has defended its governance and valuation processes in response to severa...

Related News

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

SMES TAKE RETAIL MARKET SHARE AS CONSUMERS CHOOSE PERSONALISATION

IN a battle for the hearts and wallets of Australian consumers, it appears that small and medium retail businesses...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter