BIS forecasts commercial property to fall throughout next 5 years as interest rates rise. In the past five years however, low yields have caused large returns for Sydney and Melbourne markets.
From 2018-2022, the total returns for the year on Sydney prime office spaces are predicted to drop from an average of 15.2 percent to 12.4 percent.
"Investors are going to have to be smarter about cyclical and structural drivers of property, market by market, to do well in a more challenging investment environment," said Dr Frank Gelber, head of property at BIS Oxford Economics.
Image source: BIS Oxford Economics
Article source: http://www.afr.com/real-estate/commercial/commercial-property-investments-set-to-decline-sharply-over-next-five-years-bis-20180206-h0ufub?btis
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