Property solid, but not strong
Short term property invests will go off the boil in most sectors according to the latest Macquarie property outlook report.
The report released yesterday says at present the industrial, office, retail and domestic housing sectors have all decreased but emphasises that these drops are not long term.
In fact, the report states that office markets will be the main performers in the current cycle with Melbourne and Sydney central business district (CBD) and Sydney's North Shore as solid medium term investments.
"In the short term landlords can expect a softening of demand as tenant confidence swings in line with weakness in the economy," the report says.
"Over the next 12 to 18 months Melbourne's CBD and Sydney's North Shore are the best bet, while from late 2002, Sydney's CBD offices will be the strongest market."
According to the report the residential market has flattened across the country with the exception of pockets of activity, usually situated around harbour, beach or bay locations and inner city areas.
This has lead to a drop in investment potential of newly built homes on city fringes with many young couple purchasers buying a compact home close to cities for mainly lifestyle reasons.
The report says 80 per cent of first home buyers now buy an existing dwelling, with apartments gathering most attention while more second and third home buyers are also being drawn into inner city suburbs.
Mirroring the general downturn is industrial property investments which the report claims will be subdued over the next 12 months with the exception of those areas dealing in the distribution and logistics sectors.
AUTHOR
Jason Spits
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