As we wrap up 2024, Auckland's commercial real estate market is adapting to shifting economic conditions and evolving investor priorities. With interest rates declining and businesses evaluating their property strategies, the market is experiencing diverse trends across sales, leasing, and property management. Below is an overview of key developments as we prepare for what 2025 may bring.

Sales

With an economy that has tightened up on spending, the Reserve Bank has seen fit to reduce the OCR to 4.25%, and further cuts may be due in February 2025. While this has created some optimism, buyers are still expecting discounts on sale values from the previous highs. “A” grade property with a strong current tenant and in sought-after locations will continue to hold value, while property in secondary locations is struggling to sell unless the price is discounted. Broadly speaking, we have seen a 10% drop in prices.

Leasing

While there is still plenty of activity, it’s proving challenging to lease properties at the speed we have done previously. There is certainly more property for lease (circa 2.5% vacancy). There is also a glut of larger secondary property on the market for lease, a steady supply of mid-sized property, and a lack of smaller properties on the market. This may be reflective of existing businesses consolidating and downsizing while there are some start-ups moving into the market.

Property Management

We have found increased demand for our services as the economy has shrunk and managing property has become increasingly more difficult due to the financial challenges that tenants are facing. With our experienced team of property managers and directors, we are well positioned to assist in managing these important assets which provide income and support your lifestyle.

Heading into 2025, Commercial Realty is committed to supporting our clients through these changes. Whether it’s navigating sales, leasing challenges, or managing properties effectively, our team is here to help you make informed decisions and achieve your property goals. We’ll continue to keep you updated on market developments and trends that matter most to you.