REA Insights Commercial Property Snapshot, July 2021

Natalie Yeo

First published 12 July 2021, 4:55pm

After a strong May, demand for commercial property on realcommercial.com.au dipped slightly in June.

However, South Australia and the Northern Territory bucked the trend last month, recording record volumes of ‘Buy’ searches. In the ‘Lease’ market, the Australian Capital Territory was the standout, with search volumes hitting record heights.

In this month’s commercial snapshot, we continue to track search volumes over time and demand by category. We also provide a view of user behaviour by analysing the most-searched keywords per asset class as well as looking at the most popular commercial property listings for the month.

How are search volumes tracking?

Despite a slight month-on-month decrease of 2%, ‘Buy’ searches on realcommercial.com.au remain 27% higher than this time last year.

In June, there was a record number of ‘Buy’ searches in South Australia and Northern Territory, which were the only two states/territories to record month-on-month increases.

The leasing sector recorded a more pronounced downward trend, with national searches decreasing by 4% compared to the previous month.

The Australian Capital Territory recorded the highest number of ‘lease’ searches in June, an 8% increase compared to the month prior and 16% higher than the same time last year. South Australia was the only other state to show positive month-on-month (0.3%) and year-on-year (13%) change.

The largest declines were recorded in New South Wales, which was down 8.4% month-on-month and 7.9% year-on-year.

After a strong performance in May, searches across all categories recorded a negative month-on-month change. However, all categories are showing higher search volumes compared to June 2020, with the medical/consulting sector (69%) and offices (65%) recording the highest year-on-year growth.

What are people and businesses looking to buy?

The commercial farming sector recorded the largest month-on-month growth in views-per-listing of 11%, driven by the increases in Queensland (29%) and New South Wales (16%). However, compared to June 2020 the category only saw a modest growth of 19%.

Conversely offices recorded a 4% decline in views-per-listing in June, driven by declines in Tasmania (28%), New South Wales (7%), Victoria (5%) and Queensland (3%). The office sector’s year-on-year demand growth of 57% is also relatively modest compared to other categories.

Warehouses and the land/development category saw the largest year-on-year growth in views per listing, with strong growth in Victoria recorded across both categories.

What are people and businesses looking to lease?

As with ‘buy’ views per listing, offices saw the largest month-on-month decline of 4% in the lease sector, with the biggest drops recorded in New South Wales (8%) and Victoria (6%). This, however is 33% higher than the views per lease listing recorded in June 2020, driven by the strong growth seen in Tasmania (62%) and South Australia (56%).

The year-on-year change in views per listing for showrooms is also noteworthy with the category recording the second highest growth among the categories (46%). Increases were seen across all states/territories, with the largest growth recorded in Northern Territory (150%), the Australian Capital Territory (93%) and New South Wales (69%).

What are the features that people and businesses are looking for?

This month’s analysis of the most-searched keywords consisted of several new terms. In the office sector, we saw the keyword ‘gym’ appear for the first time, evidence of the shift to ‘experience-based’ office spaces.

In the land/development sector, the keyword ‘B4’ has appeared for the second consecutive month. ‘B4’ relates to mixed-used zoning of residential and commercial property, and is a sign of the growing demand from residential developers.