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News release

Australia

Federal Budget 2014 provides solid framework for commercial property market

Offshore investors in real estate are likely to be encouraged by the fiscal policy program to reverse years of budget deficits and the stronger currency this implies, while $50b transport and infrastructure plan will provide a boost to demand in office an


​AUSTRALIA, 14 MAY 2014 – The 2014-15 Federal Budget provides a solid framework for the commercial property market as it charts a program for government fiscal policy over the next few years that is sustainable and built on conservative economic assumptions.

CEO of JLL Australia, Stephen Conry said, “This is a necessarily tough budget with an eye to the future.  

“Business will be able to take long term decisions with greater confidence having seen the Budget numbers. In turn the real estate sector will be able to move ahead with more confidence.

“Offshore investors in the real estate sector are likely to be encouraged by the reversal of the overall outlook for continuous Budget deficits and the stronger currency and lower interest rates that this implies.

“The program of transport and other infrastructure spending of $50 billion over seven years has positive implications for real estate at the State level and is also likely to provide a boost to office demand as the mining boom impact subsides. 

“Against this there will be obvious negative impacts arising from the proposed downsizing of the public sector – additional to those job losses that had been previously flagged. This will be spread nationally and over several years, although the Canberra office market will be most exposed.

“At the same time this Budget foreshadows a shift of the spending burden, most obviously in education and healthcare, from Canberra to the States. While a devolution of additional fiscal responsibility to the States is to be welcomed, we can expect increased pressure on state finances with possible implications for the real estate sector and this will need careful watching,” said Mr Conry.