The 2023/24 Budget is designed to invest in Australia’s long-term growth potential while avoiding stoking further inflationary pressures. As a result, many of the measures announced were highly targeted.
The general growth outlook for the economy remains positive, though growth is expected to slow in the year ahead but start to return to longer term growth trends from 2024-2025.
Nevertheless, economic expansion and a resumption of real wage growth will provide ongoing support for the core CRE sectors of office, industrial and retail. The office and retail sectors in particular should also benefit from a resumption in overseas migration.
A robust medium term economic outlook for Australia will also provide some level of support for investment demand into
Australian CRE as prices continue to adjust to higher financing costs. This budget also provides targeted measures that will benefit other segments of CRE. The government announced tax benefits for the build-torent sector as well as increased
childcare support payments.
The Budget aims to provide a path forward for the Australian economy. However, as a small open economy Australia is vulnerable to external shocks, which could cause the outlook to be revised.