The commercial property market down under seems to be recovering from the natural disaster that was the Queensland floods.
The commercial property sector was affected greatly by the floods which hit Australia back in December of last year, forcing the evacuation of thousands of people from towns and cities. At least seventy towns and over 200,000 people were affected. Damage was initially estimated at around A$ 1 billion and over three quarters of the state of Queensland was declared a disaster zone.
The damage to the economy and indeed the commercial property market was colossal, with Queensland Treasurer Andrew Fraser saying it was not possible to put a figure on the damage; ‘other than to say the damage bill is going to start with a b and not an m.’
The damage was so bad, Australian Prime Minister Julia Gillard announced a flood levy, which will help pay the estimated A$5.6 billion bill for flood devastation across eastern Australia. The levy declared that, those earning between A$50,000 and A$100,000 a year would pay an additional 0.5 per cent flood levy tax, while those earning over A$100,000 would pay an additional 1 per cent tax.
Signs of a recovery in the Australian commercial property market are beginning to emerge. CB Richard Ellis (CBRE), said: ‘Australian commercial property sales in the second quarter soared by more than four times the value of transactions in the previous three months, when natural disasters dampened activity.’
This is very welcome news following the expected poor performance in quarter 1 of this year. CBRE declared that the turnover in the commercial property sector during quarter 1 was the lowest for twenty years.
CBRE executive director, global research and consulting, Kevin Stanley stated: ‘The office market is fundamentally in good shape and improving. Floods and cyclones in Queensland, the Japanese and New Zealand earthquakes and general global uncertainty all conspired to create a very slow start to the investment year.’
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