The 2024 Federal Budget has landed, and commercial real estate stakeholders are scrutinising its potential effects on the industry. While the budget prioritises cost-of-living relief, infrastructure investment, and sustainability initiatives, its influence on commercial properties remains to be seen. Here’s a breakdown of key measures and their possible implications:
$6.2 Billion housing package: The government’s commitment to infrastructure development, particularly near city centres, could improve accessibility and create demand for commercial space in those areas. However, the specific locations targeted and the timeline for these projects will be crucial factors.
Extension of instant asset write-off: Extending the $20,000 instant asset write-off for small businesses could incentivise them to invest in renovations or upgrades for their commercial spaces. This might lead to increased demand for fit-out and refurbishment services.
Focus on ‘National Interest’ industries: The budget prioritises investment in sectors like renewable energy and critical minerals. This could translate to increased demand for commercial spaces catering to these industries, particularly in designated development zones.
The 2024 budget’s impact on commercial real estate remains uncertain. While some measures might indirectly stimulate demand or investment, a more comprehensive analysis is needed to understand the true effects. Here’s what industry players should watch for:
- Specific details of infrastructure projects: Knowing the locations and timelines of planned infrastructure developments will provide clearer insights into potential commercial real estate hotspots.
- Impact of rent assistance on vacancy rates: Monitoring rental vacancy rates, particularly in affordable segments, will reveal if the increased rent assistance translates to higher occupancy.
- Shift in demand towards specific sectors: Tracking investments and growth trends in ‘National Interest’ industries will indicate potential demand for commercial space within those sectors.
The 2024 budget doesn’t hold any major game-changers for commercial real estate. However, it introduces measures that could indirectly influence the industry’s trajectory. Continued monitoring of market trends and a close analysis of how these policies unfold will be crucial for navigating the evolving commercial real estate landscape.