The difficulty in commercial transactions has been evident across all price points. The over $5 million market recorded declines in excess of 50 per cent (so far this year) compared to the highs of 2022. 2020 was a historically low volume year across the larger end of the market with $40.2 billion in sales recorded - below the ten year average $57.3billion per annum. As the first eight months of 2023 has achieved $27.1 billion, volumes are on track to exceed this low 2020 period, albeit not pull ahead of the longer term average.
While private investors have been the most active sellers this year, they continue to also be the most active buyers with net acquisitions in excess of $2 billion. This is the first time these buyers have held a positive net position in the last ten years, highlighting the opportunistic nature of this buyer type, capitalising on market uncertainty and future development, value-add or land banking opportunities. REITs and listed funds have been strong sellers in the marketplace, disposing of more than $7 billion in assets, with net acquisitions at -$5.4billion. This is their lowest net position of the last ten years. Similarly, cross border investment has had the quietest year of the last 10, despite the favourable Australian dollar, due to uncertainty in office markets and limited trophy assets on offer.
Transactions by asset type highlight this reduction in office assets, however, retail and industrial remain active with investment by state showing similar trends with NSW, Victoria and Queensland remaining the most active while the smaller ACT, Tasmania and NT markets have seen a greater decline.
