CBRE: Enquiries in Australia declining significantly

A survey of CBRE investment and valuation professionals in Asia Pacific conducted between March 20 and March 31 found two-thirds of respondents have seen investment enquiries deteriorate following the onset of the novel coronavirus disease COVID-19. Mild cap rate expansion has been observed since the outbreak — a trend expected to continue for the remainder of the year.

Although 50 percent of respondents observed no change to pricing, a third of those surveyed stated prices had contracted by 10 percent or less since the outbreak.

Recent interest rate cuts are not translating to lower borrowing costs. However, borrowing costs in Australia have risen as banks factor a risk premium into commercial loans and adopt a lower LTV ratio of 50 percent to 55 percent for new loans. And enquiries in Australia have weakened the most, with most respondents stating that investment enquiries have declined significantly.

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