Hayne Royal Commission impact on CRE

2018 was a bumper year for Australian Commercial Real Estate (CRE). Yields in many sectors and markets are at or near record lows, transaction volume reached an all time high and vacancy rates in some office markets, such as the Sydney and Melbourne CBD, are testing historic lows.

However in 2019, economically, downside risks are increasing. Global trade tensions, Brexit and the possibility of slower economic growth in China, Europe and the US has resulted in downward revisions to growth forecasts and this has contributed to significant falls in the responses to Australian consumer confidence and business conditions surveys. In addition, uncertainty around the upcoming federal election (due by May) as well as implications for the financial services sector from the Hayne Royal Commission may inhibit business and investment decision making.

That said, Cushman & Wakefield Research’s Key Economic Indicators for February show that while economic growth isn’t surging, nor is it collapsing. Indeed, the ‘Relative to average’ net balance of lights improved slightly from December’s ’0′ to ‘+1′.

 

Download Cushman & Wakefield’s report here.

By: JAGONAL