Over the weekend, the home auction market in Sydney made another remarkable performance. After a series of home price declines and a poor auction clearance rates in January, Sydney is bound for recovery. As the housing sector heats up, the office sector is also seeing strong demand.
According to Commercial Real Estate, there is a short supply and high demand for office space and that is partly because of the growing tech companies in the city. Special attention is given to Australian property development company Stockland and real estate management firm Mirvac for having good numbers. The two companies have reported that their vacancies are steady while rents are holding up.
Both companies strive to keep the supply of premium offices at bay amid high demand. It should be noted though that 2015 total office sales was not as high as 2014. Still a total of $15.91 billion in office sales was recorded last year while 2014 had $17.35 billion. The reason for the $1.44 billion difference was the lack of supply of prime offices.
According to Cushman and Wakefield's national research director, John Sears, the office sector has the weakening Australian dollar against the U.S. dollar to thank for. He said, "With wages and rent making up around 52 per cent of total costs for Australian professional service firms, the softer dollar has made Australia a more attractive location for multinational firms expanding in the region. This means that for an offshore-based tenant, opening an office in Sydney is potentially around 35 percent cheaper than it was a few years ago."
According to Mondaq, global real estate agency DTZ has released a recent data that puts Sydney in the 10th place when it comes to being the most popular commercial real estate market to invest in worldwide. Meanwhile, Sydney is second only to Japan in the Asia-pacific region. One of the reasons that makes Sydney attractive to investors is the low interest rate.