Welcome to 2022!
I hope that you and your families are all healthy and looking forward to the unexpected year ahead of 2022.
After all, we have started the year with a summer of Omicron, equity market rollercoasters, Ukraine/Russia tensions, Taiwan/China tensions, potential interest rate increases with inflation starting to surface again after so many years… do we expect frogs and locusts next?
With the ongoing health and potential economic issues, the Melbourne real estate market both within the commercial and residential submarkets have kept momentum with no evidence of any sort of shift from the 2021 year thus far.
That’s not to say that will remain at this present level, but you would be reluctant to predict any major shift in the status quo, with both State and Federal elections in 2022. If history repeats itself, the Reserve Bank of Australia would be very cautious in amending interest rates with elections in mind. The big question will be the consumer and the perception of health issues still on the lips of every conversation that you have, with other factors still in play since the beginning of COVID-19 in March 2020.
Current issues:
– Commercial Tenancy Relief Scheme (CTRS) has now been extended by 2 months to 15 March 2022, being retrospective from January 2022. The extension is available to businesses with an annual turnover of $10 million or less and of whom suffered a decline of 30% or more in turnover due to COVID-19.
– Again, we highlight current market conditions coupled with usual market incentives provide a minefield for valuers. Taking into account all current factors and circumstances, disparity as to a true current market rent level is at times hard to determine.
– Caution to be exercised in relation to “face” and “net effective” rental levels. The latter inclusive of rent-free period, capital expenditure building works and/or a combination or both.
– Too early to call, but listings across all sectors to remain tight for the first quarter of 2022, with no short-term hurdles.
– Continuity of market forces to remain stable, short to medium, barring factors out of unusual context.
– Land Tax hurdles with increases of 20% mooted in some instances.
I and my team at FVG wish you a healthy and successful 2022, and we again look forward to be of service to you in regard to property valuations, rental advice/determinations and general real estate advice.
If you require any advisory/valuation/representation assistance, please do not hesitate
to contact Mark Ruttner on 0411 419 674 or mr@fvg.com.au
For any General Enquiries please email valuations@fvg.com.au or call (03) 9690 1112
