COVID effect on supply and pricing

[jmjj_jc]

Hi there,

With the covid lockdown, what are the expected repercussions on NZ commercial property pricing and market supply in the next 6-12 months.
I suspect with some small businesses going out of business during this time, commercial property supply in the market will increase and prices will go down?

Looking forward to hearing what people think, mixed reviews elsewhere.
Thank you

[Beano]

Hi there,

With the covid lockdown, what are the expected repercussions on NZ commercial property pricing and market supply in the next 6-12 months.
I suspect with some small businesses going out of business during this time, commercial property supply in the market will increase and prices will go down?

Looking forward to hearing what people think, mixed reviews elsewhere.
Thank you

Definitely see a reduction in the rentals especially retail.
Perhaps a sign but the first Bayleys total property book of the year had the most properties listed ever.

[jmjj_jc]

Thanks for your response Beano.

What do you think will likely happen to tenancies/leases of office and industrial?

Thanks

[klauster]

I would expect “NZ commercial property pricing and market supply” will change in sync with a lower demand because of bankrupted companies but also by forced changes doing office work remotely, replacing employees with contractor working from home, etc

[McDuck]

I would expect “NZ commercial property pricing and market supply” will change in sync with a lower demand because of bankrupted companies but also by forced changes doing office work remotely, replacing employees with contractor working from home, etc

The fantasy world of money and numbers is a mere reflection of the real world.
The real world consists of physical human movement and needs.

Adam Smith, that first great economist, talked about the riches bought about by job specialization.
I think the farmer at the top of the river stopped farming, just made nails instead, and shipped them down to the city.
He was able to do it faster and cheaper due to repetition etc.
He then used the profit to buy food.

This idea has been applied globally.

Adam never said what would happen if the river dried up, and the cost of getting things to market became prohibitive.

[Beano]

Thanks for your response Beano.

What do you think will likely happen to tenancies/leases of office and industrial?

Thanks

I think the vacancies will increase and the rate m2 will drop