Perth’s industrial market is joining the residential price gain party
Honing in on opportunities available across the region, the Real Estate Institute of Western Australia (REIWA) has revealed one area of the commercial property market is standing head and shoulders above the rest.
Following the stellar residential results on show over FY24 in Perth’s residential market, REIWA has taken a fine-tooth comb to the commercial sector, revealing the industrial market was the top performer in the year to May 2024.
While figures are still preliminary (and likely to see further increases), REIWA said the industrial market beat out office and retail markets across the city in the 12-month period.
Calling it the “standout performer” across commercial assets, REIWA said there is demand for larger industrial lots being seen, while there is a shortage of developed land.
Lo and behold, this has led to increasing prices across industrial areas, with the trend set to continue.
REIWA stated that since COVID-19, there has been a larger volume of sales than there was pre-COVID, with prices now exceeding “figures seen before the economic downturn”.
While many consider commercial property to be more expensive than residential, it’s not always the case – even though prices did lift by more than 13 per cent to an annual median sale price per square metre sitting at $2,353 at May’s end.
With 1,005 industrial sales taking place across the year to May, 8.7 per cent of these sales were priced between $100,000 and $250,000.
One in four sales – or 25 per cent – found buyers between $250,000 and $500,000. A further one-fifth (19.8 per cent) were sold for between $500,000 and $750,000.
Just over 10 per cent (10.6 per cent) cost between $750,000 and $1 million, while 30.4 per cent of transactions were priced between $1 million and $5 million.
Just 5.5 per cent of sales went for more than $5 million.
In comparison, the office market was more subdued than the industrial market, raised REIWA.
Even so, prices are still rising, in line with “fairly stable” office vacancy rates.
Citing the Property Council of Australia, REIWA noted that the Perth CBD had defied national trends, recording the only decrease in the office vacancy rate among Australia’s capital cities.
At just 14.9 per cent in January 2024, having fallen from the 15.9 per cent recorded in mid-2023, it was “the lowest vacancy rate since 2015”.