The continued handover of new supply during a period of prolonged tepid economic conditions, bearish market sentiment and limited business/employment growth have resulted in a significant amount of oversupply across all asset classes.
As a result vacancy rates are on the rise, particularly in more mature developments, as new supply continues to outperform new arrivals, while there is also an increased demand for shared and coworking space, slowly encroaching on the serviced office market.
In some cases, particularly strata-titled developments, landlords are offering rent-free periods of up to one year on long-term leases.
Single landlord buildings are also now offering extremely flexible terms for large multinationals to retain existing tenants, while newly planned developments are scaling back on their original plans to bring more commercial space to the market.
Extended post-completion payment plans The steady decline in sales prices has increased affordability and hence opened the market to a wider investor pool, thus facilitated the initial rise in end-user and first-time buyers.
As a result, developers increasingly launch projects with low down payments, flexible post-completion payment plans, which certainly made off-plan properties more attractive to investors/end users with limited upfront capital.
What generally happens is that developers are offering long-term post-handover payment plans, which means instalments are low, similar to rental payments.