Australia's overall political stability will offer buoyancy to the nation’s commercial property market deep into the 2019 financial year, regardless of any jostling for power out of Canberra.
Experts are cautiously optimistic about the sustainability of the market but warn any changes to policy or promises around property and land tax or stamp duty will be watched closely.
DIP IN MELBOURNE
But that optimism comes as the latest ANZ Property Council survey reveals confidence in Victoria - one of the nation’s strongest markets - has taken a hit.
The Property Council’s Victorian deputy executive director Linda Allison says the shift in Victoria reflects the uncertainty affecting the pipeline of new commercial and residential development in Melbourne’s CBD and surrounding areas.
She says it is vital that governments continue to lay the foundations to keep the industry moving.
‘Melbourne’s CBD is the engine room of the Victorian economy,’ Allison says.
‘It is important to have the right economic and planning levers in place to ensure Melbourne’s CBD continues to maintain a strong office supply.
‘We need the right planning framework to ensure the types of commercial office that tenants are demanding can be built.’
THE MARKET CORRECTION WE NEED TO HAVE
Cromwell Property Group's head of retail funds management Hamish Wehl says any political unease nationally or across each state could actually work in the market’s favour.
'Commercial property prices are too high and we are waiting to see that value come back,' he says.
'Any negative news on the election or change of direction politically could be a trigger to bring it down.'
Wehl flags controversial changes to the Queensland’s workcover laws by former Queensland premier Campbell Newman as a prime example of how leasing and commercial markets could be adversely effected.
EYES ON CANBERRA
CBRE’s head of research Bradley Speers says any swing to a Labor Government under leader Bill Shorten could offer benefit the office market in the nation’s capital.
‘If Labor wins the federal government, we expect this will benefit the Canberra office market because the public sector tends to expand at a higher rate when Labor is in office,’ Speers says.
THE GLOBAL OUTLOOK
Globally, Speers says US President Donald Trump’s fiscal policy measures, in conjunction with the escalating trade wars, could drive inflation in the US and a rise in interest rates leading to a shallow recession by the end of 2019.
‘This will reduce global economic growth, demand for China’s goods and in turn Australia’s economy because it is highly dependent on Chinese demand.’