The first day of trading after the Coalition’s unexpected re-election pushed Australia’s stock market to its highest level since 2007 as investors targeted the banking sector.

With the big four banks enjoying gains of between six and nine per cent over the trading day, LJ Hooker Principal Marcel Elias said the display of confidence could lead to a rise in activity in within a commercial property market which had been starved of exchanges against the backdrop of the 2018 Hayne Royal Commission and flagged property-tax reforms under a likely Labor Government.

"The surge in equities would further underline the value in commercial real estate returns," he said.

“The inter-related nature of the share, bond and real estate markets now points to the very strong possibility of growth in the commercial property sector."

Mr Elias said Monday’s share market activity placed the commercial property investment market in a strong position to attract institutions through to high net worth investors.

"The weight of money directed at the share market could be the calling card for future tightening of yields in the commercial property market," he said.

"Buyers and investors who have been contemplating buying should assess their strategies against the current environment.”

The share market bounce came despite economists predicting moderate growth over the coming two years, citing a downturn in dwelling building and infrastructure spending following the winding down of the NBN roll-out and other private sector engineering.

Mr Elias said a moderating Australian dollar coupled with the possibility of a drop in the cash rate at June’s Reserve Bank of Australia board meeting would also improve the outlook for the commercial market.

"Commercial property sales volumes have been down over the last 6-12 months, constrained by a lack of listings rather than market sentiment," he said.

“Leasing markets – especially in the industrial sector – have been very competitive over the last year as a result of a healthy economic outlook and the lack of options for business owners to transition from being tenants to owner-occupants.

“I think a lot of investors were concerned about selling out of the market because they didn’t know where there they would put their money.

"Stock in the commercial market has declined significantly.”

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