Historically Australian commercial property values have been independent of the US equities market. However, following the GFC, that trend has changed.
Bill Moss, the former Executive Director of Macquarie Group, believes that although the Australian property market is generally in “good shape” it is possible for commercial property prices to fall a bit further.
Moss explains that when the GFC hit, the world economy was no longer fuelled by debt and the property market began to act more like equities for the first time in twenty years. Most analysts expect commercial property to improve further in the near future, but Moss warns that if the US equities take a dive, so may the commercial market before recovering.