The retail spending resurgence in Australia is a result of stable economic conditions on the back of increasing house prices and low interest rates.

The latest retail trade figures from the ABS for the month of May 2015 show an increase of 0.3 percent, taking the annual rate of growth to 4.7 percent. This is the strongest rate of growth since November 2014.

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The retail landscape is becoming more appealing to the consumer with the emergence of many new players, including a range of international brands. This has driven retail spending up and resulted in particularly strong end of financial year sales.

Dynamic lifestyle precinct Railway Terrace in Milton provides a great retail opportunity in South Brisbane’s growing residential area.

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By sector, the current strength in spending is being led by growth in household goods retailing, which is currently growing at an annualized rate of 9.5 percent. This has been driven by rising house prices in Sydney and Melbourne, and consolidated by a lift in housing supply and transactions. During the month of May, strong gains were also made in food retailing and other retailing. Despite recording a decline during the month, the clothing and footwear category is showing annual growth of 8.9 percent. Retail trade growth across the states is reflecting the impact that low interest rates are having on both consumer spending and house price growth. Retailers continue to enjoy very buoyant conditions in New South Wales and Victoria, showing annual growth rates of 6.1 percent and 5 percent respectively — both outperforming the national average.

Recently listed Waterfront Restaurant in New Development at Rhodes

The explosion in the number of international retailers trading in Australia has driven the requirement for the transport and logistics sector to expand and develop state-of-the-art warehouses to handle the shipment of these products into the country and ultimately out into the hands of the consumer.

The low interest rate environment is also enticing Australians to spend more on their greatest assets: their homes. We’re seeing great benefits in the large-format retail category from the strong housing market. Retail turnover growth in the first quarter of the year was led by household goods, growing by 8 percent. This was the result of Australians’ buying more appliances and furniture for their castles — all items that are readily available in large format retail centers and items that are often large in size, hence increasing the space required to move them around.

The thriving retail precinct Endeavour Hills Shopping Centre now leasing in regional Victoria.

Sydney’s cold and wet winter has been great news for retailers, who have had great success with their half-yearly sales, particularly in heating and fashion.

We’re rugging up for the cold winter!

Find out more about retail leasing opportunities in Australia. 

Michael, Head of Retail for Colliers International in Australia, has over 30 years of commercial real estate experience, which has involved the sales, leasing and planning and management of shopping centers and retail assets. Michael has been involved with a vast number of retail projects across Australia, New Zealand and Singapore on behalf of institutional, corporate and private clients.