Dennis McMahon McMahon Commercial mcmahoncommercial

Recently the watch dog of the global economy, the International Monetary Fund, maintained its projection of a 4.4 per cent expansion of the world economy in 2011.

In so doing, they downgraded the New Zealand forecast on the back of the Christchurch earthquake to just 0.9 per cent this year, but jumping to 4.1 per cent next year.

The commodity boom continues unabated and Auckland has seen a resurgence in its residential property market.

In fact, some commentators are predicting Auckland to be growing at a rate of 3-3.5 per cent by the end of the year. Growth over the full year in Auckland could average 2.5 per cent with 1.5 per cent for the rest of the country.

This has led to talk of a ‘two tier' economy with the rest of the country trailing Auckland's growth and posing problems for the Reserve Bank which operates a ‘one size fits all' financial policy in its control of the official cash rate.

The upshot of all this talk of growth is that we are picking the commercial property market will improve in the second half of this year and barring no more global or local shocks will really start to strengthen in 2012.

However, it must be remembered that any improvement is coming off a low benchmark in terms of rental rates, which have taken a battering across all sectors since 2008. Nevertheless, it will be an improvement and will signal the start of the next cycle.

This year will be the last for a while where buying opportunities will present themselves and the long-term investors are out there with their cheque books ready to do deals.

The same canny investors will be the ones selling at a handsome profit at the peak of the next cycle.

If you are seriously thinking of investing in commercial property then this is the year to do it.