You can’t get safer than Bricks and Mortar, unless of course, Bricks and Mortar is caught up in one massive asset bubble. Then, it’s no different than any other investment – it can go up, and it can go down – big time.
WA Today reports of the disaster in Perth :
An already poor outlook for Perth’s commercial property market has been made even worse, with predictions of a massive fall in the price of prime office property and a long time before the good times return.
A combination of oversupply, poor demand, and falling rents leading to falling prices would put the office market into a tailspin from which it might take up to 10 years to recover.
Prices had already fallen about 18 per cent this year, and this had been revised to include a further 30 per cent drop next year and 14 per cent the year after, with prices for office space falling from a peak of an “insane” $11,000 a square metre to $5200, Dr Gelber said.
“Rents have fallen about 10 per cent, but they’ll drop another 30 per cent. Falling rents will drive another fall in prices. It’s a disaster out there. It’s just dreadful.”
More can be found here.
ยป ‘It’s a disaster out there’ – WA Today, 21st September 2009
Baloney – 10% rental falls? I can inform you that A-grade and premium commercial property in Sydney now attracts 30%+ incentives OR MORE for 10 year leases. The situation is desperate.