Sales of commercial properties in Australia have declined by 33 percent in the fourth quarter of 2012, according to a report compiled by the Los-Angeles based brokering firm, CBRE Group Inc.
The report said that in the past three months, sale of industrial, retail and office properties fell lower than $3.1 billion (Australian $2.9 billion). In November 2012, retail sales slumped for the first time in four months. Home loan approvals also witnessed a drop in November even after the Central Bank of the country slashed down interest rates by 1.75 percent, reports Bloomberg.
Office building sales were hit the hardest, recording a 12 percent drop in 2012. However, sales of retail and industrial properties hiked to 24 and 13 percent respectively. Foreign and domestic investing activity in the country dropped by 16.6 and 72.1 percent respectively, reports Cyprus Today.
"The underlying level of transactions softened in the second half of 2012. Mixed and sub-trend economic growth evidence, combined with subdued levels of consumer and business confidence, have held back growth assumptions and hence valuations." Stephen McNabb, head of Australian research at CBRE, told Bloomberg.
Recently, home sales accelerated in Australia. However, experts believe the little spike would not affect the stumbling state of the real estate market in the country, reports The Australian.
The fall in sales was attributed to the foreign investment activity slowdown, reports Bloomberg.
"The results would send a chill through retailers' spines as they look to 2013", Margy Osmond, head of Australian Retailers Association told The Australian.
Huge sale slumps were recorded in furniture, hardware and department stores. Economists asserted that the condition of retail real estate is going to worsen in the coming months of 2013. The commercial real estate sales slump will have a depressing effect on the country's economy as well.