International Students Driving Population Growth
Pete has been closely observing the current state of the property sector. He’s noted a significant spike in population growth, largely driven by international students and visitor visas. However, Pete predicts a slowdown to a more sustainable pace in the near future.
A Drop in Rental Rates by 2024
Despite historically low vacancy rates, Pete anticipates a drop in rental rates by 2024. This suggests that rental yields might align with interest rate patterns. On the commercial property front, even as we witness a gradual return to pre-pandemic conditions, office occupancy remains significantly below previous levels. This has resulted in an uptick in vacancy rates, currently around 15%, which subsequently impacts office valuations.
Repurposing Commercial Office Spaces
The road ahead presents challenges, especially considering the complexities of repurposing office spaces into residential areas. Yet, Pete remains optimistic about the market’s inherent ability to self-correct, which he believes will usher in stability in the property sector.
For a more detailed analysis and direct insights from Pete, check out the full article here.