As Sydney's residential property market is starting to cool down, investors seem ready to switch on commercial real estate which is poised to experience its own boom.
According to Your Investment Property Mag, Malcolm Gunning, head of real estate agency Gunning Real Estate, believes that investors will show more interests in putting capital to suburban commercial and retail properties throughout this year.
"These are not the fancy properties you see in the property sections, they are solid commercial and retail properties that give good return on investment," Gunning said. "We believe properties like this will continue to see a lot of attention throughout 2016 and believe this is a direct flow on from the changes to zoning and banks preference to lending more to commercial investors in particular for property within Sydney's 20km ring."
Zoning changes and improved transport links are improving the popularity of places like Rockdale, Kingsgrove, Revesby and Bankstown.
Meanwhile, commercial property market in Central Coast is beginning to experience a boom with prices reaching new highs and properties for lease gaining more popularity. According to The Daily Telegraph, Ty Blanch, principal of LJ Hooker Commercial Central Coast, said, "I think we're finally moving out of the global financial crisis and into a situation where there's higher business confidence across the board."
"Most businesses have come to realise they can now move on from a time of insecurity and into a time where business growth and planning is a real positive moving forward," he added.
Erina, West Gosford, Somersby and Tuggerah are some of the current hotspots for commercial real estate investors.
"Commercial offers a better return and more security than what you get with residential," Blanch said. "You've got 3 to 10-year leases returning about 8 to 9.5 per cent in commercial, whereas with residential you're looking at 6 to 12 month leases with only a 5 to 5.5 per cent annual return."