Property
Issue No. 48 - August/September 2009
Tight retail sector absorbs stimulus
by Mr Kel Spencer
Although the South Australian retail property sector is somewhat sheltered by some of the factors currently affecting other Australian retail markets, it cannot be said the current economic climate is not affecting consumer sentiment.
The strength of SA’s retail sector is highly influenced by the level of housing affordability within SA.
Homeowners with higher levels of disposable income can then spend within the retail industry. Despite substantial interest rate cuts and Government stimulus packages, recent predictions still anticipate unemployment to rise and all Australian industries to suffer before anything improves.
Throughout the Christmas period retailers took advantage of government cash bonuses, intensifying Christmas sales aimed at selling excess stock before the market really started to contract. Retailers have also made the most of the more recent stimulus cash
handouts through additional sales promotions in an attempt to maintain consumer spending. Unfortunately,
despite their best efforts to entice consumers to continue to spend additional disposable income freed up from large interest rate cuts, the announcement of the Budget deficit has increased negative sentiment.
Activity in the retail sector of the SA property market has been limited so far in 2009. In comparison to 39 recorded transactions in the first five months of 2008 totalling $137.45 million, for the same period in 2009 SA recorded 17 retail transactions totalling $133.53 million.
Although the total dollar value in sales seem similar and with significant sales occurring in both periods ($87.5 million sale of Stockland Parabanks in April 2008 and the sale of Golden Grove Village and Mawson Lakes Town Centre for $100 million and $26 million respectively) the lower number of sales transactions this year is quite significant.
Retail Development SA currently has existing retail stock totalling 1,331,079m2 with an expected 279,302m2 of constr...
