October 2006
Example Article: RATES RISES HAVE MINIMAL EFFECT TO DEMANDThe recent interest rate rise was anticipated by the market some months ago and appears to have made little difference to the level of strong demand for commercial property investments.
The market is still characterised by a surplus of potential investors seeking a safe home for their money. There is considerable competition amongst lenders of finance with lending rates remaining competitive. Rates are well below levels that existed when yields on investment properties were in the 8-10% range. Rates are not expected to increase to an extent that would justify a fundamental change to property yields.
Stock levels continue to remain low with
quality property investments selling in
the Sydney metropolitan area at yields
between 5% and 7%. Investors seeking
a higher yield are likely to be buying
properties with a greater risk potential
which should be approached with some
caution.
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