Welcome to this special edition of COMMO for Knight Frank, showcasing insights and market-leading research from some of the firm’s property experts across its National Capital Markets team.

Australia’s Capital Markets have seen subdued activity over the past few years, but as we move into the second half of 2024 the tide seems to be turning, with indications we are moving through the bottom of the cycle as activity gains momentum, according to Knight Frank’s National Head of Capital Markets Justin Bond.

Bond writes that with more major listings coming to the market, it’s expected it will be a strong finish to 2024.

With an expectation that interest rates in Australia are nearing or at the peak, despite some sticky inflation, sentiment in property markets amongst all investors is improving, according to Knight Frank’s Chief Economist Ben Burston.

Ben comments that prime yields have largely stabilised across all sectors, including in offices where the uncertainty and lack of liquidity has been most acute.

As the market shifts firstly to recovery and then on to the next growth cycle, opportunities for investors abound. And there are opportunities in every sector, according to Knight Frank.

In the office market, prime high-quality leading ESG-credentialed assets are in demand, with the premium Sydney CBD market and Brisbane undoubtedly the most desired among institutional buyers, according to Knight Frank’s National Head of Institutional Sales and Capital Advisory Ben Schubert.

Sydney is particularly a focus for Asian investors, who are returning to the market, according to Knight Frank’s Head of Asian Markets Australia Dominic Ong.

In Australia’s Living sector, in which there continues to be growing interest, activity is currently concentrated in co-living and student accommodation, with build-to-rent expected to be a stronger focus from 2025 as the cost of debt and construction costs stabilise, according to Knight Frank’s Head of Alternatives Tim Holtsbaum.

Links to Knight Frank National Capital Markets insights below:

Sydney a focus for Asian investors, who are returning to the market - By Knight Frank Partner, Head of Asian Markets Australia, Dominic Ong

The capital value correction is close to being complete, with activity now picking up - By Knight Frank Partner, National Head of Institutional Sales and Capital Advisory Ben Schubert

What are the most sought-after assets in Living Sectors in 2024? - By Knight Frank Partner, Head of Alternatives, Tim Holtsbaum

Investment activity in Australia’s capital markets is gaining momentum - By Justin Bond, Knight Frank National Head of Capital Markets

Shifting gear to income growth as property moves past peak uncertainty- By Knight Frank Chief Economist Ben Burston