Have you noticed how many shops, and commercial places seem to close down in and around Sydney ? Drive along oxford st, parramatta rd, around the CBD, and in close suburbs to see how many commercial places are for lease or for sale. I'm talking about something we can see for real here, not another BS statistic manipulated by the banks. I may be wrong, but I don't remember there were so many empty spaces a year ago. Is this a sign that the property market won't keep growing 15% p.a ? and maybe bust ? you own a business, the owner keeps increasing the rent, you can try to sell your sandwiches $20 each, and justify such high prices by : "rental increased", but customers won't come anymore. rentals can't go to the sky.
Have you noticed how many shops, and commercial places seem to close down in and around Sydney ? Drive along oxford st, parramatta rd, around the CBD, and in close suburbs to see how many commercial places are for lease or for sale. I'm talking about something we can see for real here, not another BS statistic manipulated by the banks. I may be wrong, but I don't remember there were so many empty spaces a year ago. Is this a sign that the property market won't keep growing 15% p.a ? and maybe bust ? you own a business, the owner keeps increasing the rent, you can try to sell your sandwiches $20 each, and justify such high prices by : "rental increased", but customers won't come anymore. rentals can't go to the sky.
Yep, recently lost some fave retailers around our area who couldn't keep up with the rent hikes. Pretty much the outcome of real estate bubbles. Commercial rents push small businesses to the wall, they fold and the jobs go with them. They are usually replaced with some chain store or franchise selling cardboard tasting food or plastic crap for $2, who screw down supplier margins with volume purchases, leading to more lost income in the supply chain and more unemployment. But it makes the rich richer, and that's all that matters.
Bridge rd in Richmond has been smashed lately. Some sections would be around 40-50% empty and sitting empty for months, a lot of big names moved out and not being replaced.
It's interesting because there was a flurry of sales around 2011-12 when things in real estate were hot. It appears new landlords have squeezed tenants out of their own business'. Maybe residential will go the same, it to has the same logic 'I'll pay a bit more and just raise the rent'. Doesn't work so well when no one can pay it
Yep, recently lost some fave retailers around our area who couldn't keep up with the rent hikes. Pretty much the outcome of real estate bubbles. Commercial rents push small businesses to the wall, they fold and the jobs go with them. They are usually replaced with some chain store or franchise selling cardboard tasting food or plastic crap for $2, who screw down supplier margins with volume purchases, leading to more lost income in the supply chain and more unemployment. But it makes the rich richer, and that's all that matters.
I was speaking to a fellow today who has run the deli section of a Westfield's shopping center for many years now , a couple of decades I think.
Anyway I remember speaking to him about a year of so ago and he told me he was selling up and retiring. He told me the rent was too much, he has since sold the buisiness. Back then, I asked him what thisthe lease was. Now this is in a westfields complex, but its not one of the shops , just one of those sections set up in the middle. The size would be about 10m x 5m, if that, less than 50 square metres. And how much rentwould you expect to pay, wait for it, $7,000 per week.
And today when speaking to him, he is still helping the new owner out a couple of days per week, I asked about rental increases, he just said its automatic, goes up every year at 5% increase. He said now he can sleep at night.
But just look at it, 7k per week, that's 364k per year rent, with 5% increases every year means he will be paying 382k next year and 400k the year after. And no wonder they cant do buisiness, these costs are before staff costs, power bills , insurance bills , government red tape and whatever other bullshit there is.
Don't know how people could expect it could continue like this. Our wages are the highest in the world and I dont see how they can go any higher on a blue collar worker and either will white collar workers who will just end up replacing any blue worker jobs left as they are more qualified, even though they dont need to be.
This is another problem we face, where white collar workers without jobs will end up replacing what blue collar jobs are left, and the blue collar worker will be made near obsolete.
I will give you the example. Many university educated will be unable to find a job in their field . As a result, they will eventually apply for whatever job they can. They will apply for that bar position or retail postion or perhaps a factory or industrial placement. Because they have some formal qualifications, on paper that may be more appealing than somebody who may not.
So the end result is, the average white collar worker without work, will eventually replace what blue collar jobs that are left, the white collar worker then lives with less wages than expected and the blue collar worker is forced into unemployment.
With our wages being the highest in the world, if they do not come down , this scenario will just continue as will overall job losses. No rocket science.
yes, and we're talking about premium locations here. local businesses are closing down at premium locations. I am no economy expert, but I see a tangible sign here that prices won't go much higher, and may even collapse. logically, if struggling businesses close down, well, commercial property owners won't keep their property empty forever, and will release it on the market. and these business owners deprived from their incomes won't be able to cope with their personal home mortgage loan. we should start seeing more people not being able to pay their mortgage back, selling their home, and more homes for sale on the market means prices going down
i saw quite a few empty shops for lease in ashfield and burwood too, which are usually dynamic, populated suburbs
yes, and we're talking about premium locations here. local businesses are closing down at premium locations. I am no economy expert, but I see a tangible sign here that prices won't go much higher, and may even collapse. logically, if struggling businesses close down, well, commercial property owners won't keep their property empty forever, and will release it on the market. and these business owners deprived from their incomes won't be able to cope with their personal home mortgage loan. we should start seeing more people not being able to pay their mortgage back, selling their home, and more homes for sale on the market means prices going down
i saw quite a few empty shops for lease in ashfield and burwood too, which are usually dynamic, populated suburbs
Are they mainly coffee shops, cafe's and restaurants?
Any expressed market opinion is my own and is not to be taken as financial advice
Have you noticed how many shops, and commercial places seem to close down in and around Sydney ? Drive along oxford st, parramatta rd, around the CBD, and in close suburbs to see how many commercial places are for lease or for sale. I'm talking about something we can see for real here, not another BS statistic manipulated by the banks. I may be wrong, but I don't remember there were so many empty spaces a year ago. Is this a sign that the property market won't keep growing 15% p.a ? and maybe bust ? you own a business, the owner keeps increasing the rent, you can try to sell your sandwiches $20 each, and justify such high prices by : "rental increased", but customers won't come anymore. rentals can't go to the sky.
Retail is a funny game, forever changing and VERY localised.
Just as an example, you mention Oxford St, Paddington. It had been a fashionable gold mine for retailers for a decade or 2 but has recently gone downhill. Lots of empty shops. Cafés and pubs ok still but not the place to go shopping any more. Why would this be? There is the move to online but in this case it's Westfield's fault. Basically there is now a flagship Westfield at each end of Oxford St - being Bondi Junction and Pitt St. These operate as black holes to suck the life out of the independent boutiques along Oxford St. Personally I don't like it but hey, the masses vote with their $$$$
Parramatta Rd has always had it's share of bordered up shops, they seem to move up and down as redevelopment and gentrification occurs.
I think the Sydney CBD is actually better and more vibrant than I can ever remember it. Empty shops don't tend to stay empty for long.
One you didn't mention is Darling St, Balmain. It has changed but is busier. Lots of the small independent shops such as butchers and delis have been squeezed out by high rents and replaced by generica chain stores. Again, not my preference but just a sign that these things don't stand still.
Retail is a funny game, forever changing and VERY localised.
Just as an example, you mention Oxford St, Paddington. It had been a fashionable gold mine for retailers for a decade or 2 but has recently gone downhill. Lots of empty shops. Cafés and pubs ok still but not the place to go shopping any more. Why would this be? There is the move to online but in this case it's Westfield's fault. Basically there is now a flagship Westfield at each end of Oxford St - being Bondi Junction and Pitt St. These operate as black holes to suck the life out of the independent boutiques along Oxford St. Personally I don't like it but hey, the masses vote with their $$$$
Parramatta Rd has always had it's share of bordered up shops, they seem to move up and down as redevelopment and gentrification occurs.
I think the Sydney CBD is actually better and more vibrant than I can ever remember it. Empty shops don't tend to stay empty for long.
One you didn't mention is Darling St, Balmain. It has changed but is busier. Lots of the small independent shops such as butchers and delis have been squeezed out by high rents and replaced by generica chain stores. Again, not my preference but just a sign that these things don't stand still.
there is no place like paddington in Sydney. that place is nice to hang at, even if you cannot afford the expensive clothes they sell there. It's a shame all retail shops close. it's the soul of the district that is going away.
You are probably right when you say that retail is forever changing and localised. And there is the fact that more people buy online. But that doesn't explain everything IMO. Everyone still likes to go out and do shopping in the streets. I believe the high rental prices owners ask are greatly responsible for shops closing. They are not only retail shops. Restaurants also are closing down.
I contacted a commercial property agency to inquire about prices for opening an F&B business. I don't see how in these relatively good spots, where you can sell for just a few hours in the day (past 5pm, everyone oes home, and there are noone in these areas of the CBD), you can cover the rent. I always wonder how all these shops, except cafes, make money.
Have you noticed how many shops, and commercial places seem to close down in and around Sydney ? Drive along oxford st, parramatta rd, around the CBD, and in close suburbs to see how many commercial places are for lease or for sale. I'm talking about something we can see for real here, not another BS statistic manipulated by the banks. I may be wrong, but I don't remember there were so many empty spaces a year ago. Is this a sign that the property market won't keep growing 15% p.a ? and maybe bust ? you own a business, the owner keeps increasing the rent, you can try to sell your sandwiches $20 each, and justify such high prices by : "rental increased", but customers won't come anymore. rentals can't go to the sky.
its actually not as bad as it seems though your insightfulness is well regarded
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