September 22, 2023
Crystal Ball Gazing
By Harvey M. Soning, FRICS
Having recently been asked what the future is for commercial property in these challenging times, there is no simple answer to that because of the many factors that feed into this complex market.
The good news is, we have seen interest rates at this level before and the commercial property sector thrived then and it will again. What has changed is, we have become addicted to cheap money and the supply has dried up. What that means depends very much on whether you are a buyer, seller, or holder of property.
In simple terms, if interest rates rise the opportunity to earn greater interest elsewhere means property yields should also increase. If you are a buyer, the price you pay should be lower, and if you are a seller, you need to manage your expectations over the price you will receive. There are always exceptions but generally this will be the case.
