INVESTORS are still bullish about Perth and Brisbane property over the next six months, according to a sentiment survey released yesterday, while Sydney remains the preferred destination for longer-term investment. Seventy-five per cent of respondents believe prime Australian CBD office property will generate higher total returns over the next six months.
The positive sentiment also applied to secondary office markets.
But survey respondents are concerned about the dependence of those two markets on the commodity cycle, which had led to volatility in the past, especially in Perth.
Ms Matthews said that over the next three years investors were most positive about the Sydney office market.
Despite a significant increase in office supply in Melbourne, the survey found investor sentiment rebounding since the last survey.
Ms Matthews said very strong tenant demand prevented a blowout in vacancies in the short term, adding that in the medium term investor sentiment remained "moderately positive".
Canberra and Adelaide investment sentiment was moderately positive in the short term but the markets were expected to underperform in the medium term due to a high level of new office stock.
Ms Matthews said it was generally agreed that the retail market had peaked but was yet to turn down because retail sales remained relatively robust.
However, she said "most respondents to the survey now feel short-term returns will decrease".
The survey found that 78 per cent of respondents said they intended to buy real estate over the next 12 months.
"Over the long term, investors are forecasting total returns from all property classes will average 9.2 per cent over the next 10 years - down from 9.4 per cent in the last survey," JLL said.
Jones Lang LaSalle's 2006 "Investor Sentiment" survey shows that confidence in other capital city property markets over the next six months is at the highest level in five years.
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