During 2022 we have seen volumes fall by 30 per cent as the steam has come out of the investor market given the growing interest rate environment. This has resulted in a change in the buyer and seller profiles as well as the demand for certain asset classes.
In 2021 we saw the resurgence of the industrial asset class with more than $30 billion changing hands and representing 32.1 per cent of the total sales volume for the year (for assets over $2 million), while the sub $2 million price range saw a further $6.6 billion transact for industrial alone, representing 9,318 transactions. Industrial still remains in high demand by a range of buyers, however the lack of stock on market has resulted in 2022 volumes falling to just $17.3 billion and accounting for 25.9 per cent of the total pool of sales. For the smaller end of the market, rising interest rates have dampened the appetite for first time buyers who speculated in 2021, however the low vacancy environment continues to see owner occupiers actively seeking to shelter from rising rents. During 2022 this sub $2 million range saw 5,280 transactions totalling $3.8 billion, highlighting the impacts of the growing cost and difficulty to obtain finance this year.
In 2022, the swing has certainly moved back to office transactions with a high number of larger institutional, REITs, and offshore buyer groups competing for major CBD holdings setting new highs in values. This year, office assets represent 34.2 per cent of all sales, up from 27.2 per cent, despite the difficulties seen across many office markets across the country in regard to occupancy levels. Many businesses have been grappling with what their future accommodation needs may be during this post-COVID economy which sees some staff working from home on a part time or full time basis. However, the confidence of these buyers in office assets highlight the long term belief in the asset class and the trophy nature of some CBD assets on the global stage.
Retail has been another market which has seen a shift downwards in share in 2022, again the ability to obtain finance saw many buyers move up the risk curve and consider retail despite uncertainty of the future for the asset class and growing vacancies in some locations and asset types. In 2021, more than $21 billion changed hands representing 22 per cent of total turnover, however, this year this has been revised down to $12 billion accounting for 17.9 per cent, as buyers have been more considered and selective in their purchasing decisions.
The hotel and leisure sectors have been the only segments which have seen uplift in 2022. After a quiet 2021, the accommodation sector has grown in popularity accounting for $3.2 billion in sales, up from $2.3 billion last year. The increased demand for travel this year is doing much to improve occupancy rates across the country as well as moving average daily room rates up across major tourism destinations and regional centres. Interest in these assets has rebounded and has been heavily influenced by offshore interest in large, branded assets, while the smaller motel/hotel market has seen strong private buyer interest. Across the leisure market, pubs again have had a strong year with over $2.2 billion changing hands in 2022, up on relatively strong 2021 results.
