Commercial and residential property markets in Australia will remain strong through 2016 as business confidence increases, according to a major commercial real estate agency.

The latest monthly business survey from National Australia Bank revealed that the business conditions index rose from 9.8 to 10.2 points in November, and the business confidence index rose from 2.8 points to 4.8 points.

According to Colliers International, those improvements are already having an impact on markets across the country, especially Sydney’s CBD office market, which has seen conditions improve throughout 2015 with a significant decline in vacancy over the year

That trend is expected to expand to other markets such as offices in Melbourne’s CBD and Sydney’s industrial areas through 2016.

John Kenny, CEO Australia and New Zealand at Colliers International, said those improvements will eventually ripple through Australia’s residential property market too.

“We have experienced a sustained increase in business confidence over the past 12 months,” Kenny said.

“This confidence is having a positive impact across the property sector, and this optimism is starting to flow through to several of our occupier markets, as businesses become more confident in leasing office space,” he said.

While business confidence is expected to help the residential market, the strong position it is currently enjoying is having a positive effect on the country already.

“The strong residential housing market, increasing consumer confidence and the lower Australian dollar are all factors that have contributed to the current state of our economy,” national director of research at Colliers International, Nerida Conisbee said.

“Right now, Australian interest rates remain stable at their historic low of 2%. Nevertheless, the Reserve Bank continues to suggest that it is not averse to cutting rates and is waiting on key economic releases post-Christmas,” Conisbee said.

“For now, although GDP growth remains below average, business surveys suggest that the services sector will continue to improve which will support the Victorian and New South Wales economies in particular.”

Conisbee said those factors will help Australian real estate continue to be an attractive destination for offshore capital in 2016.