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The latest figures from the Australian Prudential Regulation Authority report a $7.5 billion boost to commercial property exposures in the June 2017 quarter.
That growth reflects an increase of 2.9 per cent on the figure at 30 June 2016 over all authorised deposit-taking institutions (ADIs), bringing the total value of commercial property exposures to $264.1 billion.
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Exposures within Australia accounted for 85.2 per cent ($224.9 billion) of all commercial property exposures, reflecting a growth of 3.8 per cent on the figure at 30 June 2016 ($216.6 billion).
According to the APRA figures released this week, office property is the largest category of commercial property exposures, valued at $79.4 billion (28.3 per cent), while retail property totals $63.2 billion (23.0 per cent).
Banks’ commercial exposures grew to $263.8 billion, up 1.03 per cent on the 30 June 2016 figure. Within that, major banks commercial exposures came to $211.1 billion, down 1.7 per cent from $214.7 billion the year before.
Non-major banks reported a total of $13.1 billion, reflecting a drop of $1.3 billion or 9.0 per cent. Foreign banks saw an increase in commercial property exposures to $6.7 billion from $5.7 billion the year prior, an increase of 17.5 per cent on the year prior.
CT Johnson, managing director at China research company Cross Border Management, told The Adviser that attempts to curb foreign investment via higher taxes and increased regulation was “really just nibbling at the edges”.
“It’s not going to have a material impact on the foreigners who want to come into the market,” he said, noting that the quality of life and the return on Australian property investment both present attractive prospects to foreign investors.
[Related: Business expert identifies commercial funding hotspots]
