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IT'S official - Australia's long commercial property recession is over.

  But behind the faint smiles of the country's real estate industry there is a wait-and-see attitude before the champagne corks starting popping.

  Sales are still dominated by overseas buyers.

  In Perth, for example, Southeast Asian investors bought 55 per cent of all commercial property sold last year.

   They also had a significant impact on the retail sector, accounting for 34 per cent of sales in the past 12 months.

  ''The investment clock is definitely ticking again,'' said Peter Agostino, director of sales for Jones Lang Wootton (WA).

  The industry is waiting for local buyers to return to the market in greater numbers before confirming the property market has improved but Mr Agostino said all the signs were there for a sustained recovery.

  ''Improving company profits are also a particularly good indicator for property because of the capability of business to reinvest the profits,'' he said.

  In Melbourne, Asian investors also had a big impact as many switched their allegiance from Sydney, Perth and the Gold Coast to the recession-ravaged Victorian state capital.

  Asian buyers have taken full advantage of Victoria's shaky economic performance over recent times to snap up 61 per cent of Melbourne's mortgage properties sold in the past two years for A$187 million (HK$1.02 billion).

  Asian investors accounted for 60 per cent of private transactions in Melbourne's Central Business District during the past two years, and 26.6 per cent of all property transactions.

  The Bank of China is in the process of setting up a branch in Melbourne and many believe this is another signal of a revival in the city's fortunes.

  Traditionally, Asian buyers in Australia have been most active when the market comes off the bottom and shows signs of a recovery.

  Prime office rental space around Australia is also enjoying something of a mini-boom but most of the activity has been price-driven and the only buildings likely to do well are those which continue to meet the market.

  There are fewer incentives now because much of the prime office space has gone on generous terms.

  Those who have taken the opportunity to upgrade their office accommodation have left behind a mass of vacant second-tier rental properties.



Commercial recession bites dust