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It continues to be the case very few shopping centres are changing hands. The Data App estimates the number of shopping centre transactions is the three months to August is over 60% lower than a year earlier. Consequently, both the volume (sqm) and value of shopping centre transactions are well down on a year earlier. The dearth of transactions makes the accuracy of cap rates particularly difficult, especially since these have been dominated by the non-discretionary, supermarket dominated, small retail assets.
The number of shopping centres changing hands continues to dwindle. According to The Data App estimates, in the three months to July, the number of shopping centres transacted was less than half that recorded the same time last year. Needless to say, the volume (sqm) and value were also well down on a year earlier. The continuing dearth of transactions makes the accuracy of cap rates difficult, especially since the bulk of recent activity have been for smaller, lower yielding, retail outlets.
Strong demand from visitors and migrants, combined with record low vacancy rates, resulting in a surge in rents, have brought into question the role of short-term letting platforms, such as Airbnb, as properties have switched from long-term accommodation to short-term letting.
The number of shopping centre transactions remains at a low ebb. In the first six months of this year, less than half the number of shopping centres changed hands compared to the same period a year earlier. Consequently, the volume (sqm) and value were also well down on a year earlier. The sparseness of transactions makes the current accuracy of cap rates more problematical. Even so, it seems reasonable to conclude, overall cap rates have increased by a shade under 200 basis points from their cyclical low. Continuing the trend, cap rates for smaller, everyday needs shopping centres, while having increased, remain well below those for larger destination shopping centres.
The number of shopping centre transactions continued to flounder in the three months to May, while the volume (sqm) and value of transactions, while stronger, have been boosted by some large assets changing hands. The low number of transactions is against a backdrop of cap rates now above 7%; up over 200 basis points on a year earlier. However, not all asset types have performed the same, with higher cap rates continuing to be associated with bigger, destination type, shopping centres.
After dipping down, property prices now appear to have stabilised and, along with rising mortgage rates, cost-of-living pressures and a surge in migration, housing affordability has again become a key issue. Nowhere more so than Sydney, continually recognised as one of the most unaffordable cities in the world.
Housing affordability is not a recent issue, from the beginning of the twentieth century, up until the end of 1986, roughly six months of annual personal income was the benchmark for a 10% housing deposit. This figure is currently around 16 months. So, despite a decline in property prices, entering the Sydney housing market has, through time, become increasingly onerous.