SUB- $ 2 MILLION ASSET CLASS ACTIVITY HAS SLOWED , IN LINE WITH INTEREST RATE MOVEMENTS
Vanessa Rader | Head of Research , Ray White Group
During the COVID-19 period , we saw an influx of new buyers enter the commercial market arena . Low interest rates , rising residential prices and uncertainties in the stock market made commercial property an interesting prospect for diversifying investors . Commercial investments vary in price considerably , and for new entrants the affordability of these properties with solid rental returns were quickly realised , causing a large uptick in investment activity . However , as interest rates started their upward movement last year , we were quick to see many buyers , in particular mum and dad investors and first time buyers , exit the market , leaving more experienced buyers behind . for this smaller investment class as buyers flocked from across the country , eager to pursue assets regardless of borders with income growth potential in particular in the industrial market .
This has had a significant impact on volumes with results from Q1 2023 highlighting a 60.8 per cent decline in asset sales in the sub- $ 2 million price point compared with the same period in 2022 . Q1 2022 , however , was the peak of activity , with this period recording $ 3.06 billion in sales up from Q1 2021 , where activity started to ramp up as interest rates bottomed out , recording $ 2.64 billion in the quarter . 2021 overall was a busy year
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