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News release

Australia

Responsible Federal Budget that will support commercial property market


​​The 2015-16 Federal Budget charts a steady and credible path towards economic recovery, which will create greater confidence for business with a flow on to the commercial real estate sector.

CEO of JLL Australia, Stephen Conry said, "The Budget charts a steady but credible path towards surplus and generally shows some needed optimism."  

After six years of steadily growing deficits and public sector debt, the 2015-16 Federal Budget charts a path towards financial stability. But it does so against significant headwinds – falling terms of trade, fragile business and consumer confidence and a weakening global economy.

Mr Conry said, "Against the backdrop of the $50 billion infrastructure spending program announced in last year's budget, the focus this year on small business is an important stimulant for this vital part of the economy. It will assist in a much needed rapid transition from a resource to a service-based economy.

Our own JLL Research data has shown signs of this in office and industrial enquiry by prospective tenants since late in 2014.

Interest rates are at an all-time low. The budget deficit is stimulatory. With Australian business well cashed up, and a large pool of capital available from the domestic superannuation system as well as offshore investors, the missing ingredient has been broader business and consumer confidence, which the leasing markets require.

Clearly we need bigger picture tax reform also and we need all political parties and the Senate to embrace common sense on that, together," said Mr Conry.

JLL's Australasian Head of Research, Dr David Rees said, "Both monetary and fiscal settings are now strongly set to stimulate growth.

"Australia's economy is forecast to grow in 2015/6 by 2½ to 3½% by the RBA, or by 2¾% as forecast by the Treasury. These growth rates are closely aligned with forecasts for the US economy, which is widely seen as a success story whereas Australia is seen as battling. It's hardly surprising that many offshore investors have a more positive outlook for Australia than we do ourselves. We have seen low interest rates stimulate activity in the residential market.  A recovery in investment and business confidence will flow through to rising demand in the commercial real estate sector," said Dr Rees.