9th August 2023 Article by Mmapula Moyo
According to The Sydney Morning Herald’s Stephen Miles, some commercial property sectors has been more resilient than others amid rising interest rates and inflation. The effect of working from home and the above-mentioned economic factors has been a commercial property market that has been slightly depressed in some sectors such as the office market.
However, child-care centres have proven to be strong enough to withstand the challenging economic conditions brought by unstable and rising interest rates and inflation.
Commercial property investors can be hopeful and optimistic in their pursuit of commercial property because child-care centres have performed better and not only that; the government has recently brought in major policy changes benefiting the childcare industry in a big way.
For example, as of July 2023 the Australian government has made this sector even more confident by raising the family income limit on childcare subsidies from $356,756 to $530,000 a year and increasing subsidies to families earning $80,000 or less.
Other resilient sectors include the industrial property market, which has been strong throughout Covid and interest rates challenging conditions. This is due to many retailers moving away from the retail market and preferring warehouse business model to deliver the same retail products or services that they use to deliver in retail properties via retail leases and properties.
The office sector was mainly affected by the recent ‘working from home’ model brought in by covid pandemic. Many companies are working hard to get their employees to return to the office, however, the question is will things ever be the same again? At what rate will employees return back to pre-covid working environment of office buildings?
Source: Why childcare is the ‘shining star’ of the property market (commercialrealestate.com.au)