Real estate growth in Victoria is evident. Apart from Victoria topping economic growth in the country, the State of the States report by CommSec shows indicators for real estate activity and housing construction is high in the state.
It continues to benefit from steady population growth and a healthy job market, bumping NSW off their tied top spot last quarter. Meanwhile, Tasmania holds a strong third position for Australia’s best-performing economy.
Each quarter, CommSec analyses the economic performance based on eight key indicators: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements.
Here’s a summary of State of the States report by the CommSec.
This quarter, Victoria has maintained the top spot on relative economic growth and activity in the country.
Victoria retains the top spot with construction work done 30.1% above its decade average. This is based on the total real value of residential, commercial, and engineering work completed in the quarter.
Housing finance commitments or home loans remain strong with the number of commitments increasing by 1.9%. Also, because of population growth, dwelling starts is still above long-term averages.
CommSec chief economist Craig James says Victoria’s economy is strengthening while NSW’s is weakening.
NSW ranks second on the overall economic rankings. Additionally, home-building remains strong due to the above “normal” population growth. It is, however, down by 0.1% in construction work and 7.3% in home mortgages.
The report shows NSW has the weakest annual comparison with trend home loan commitments down 15.3% on a year ago.
Population growth in Tasmania is high. Its annual population growth rate of 1.24% is the fastest the state has seen in 27 years.
Population growth in Tasmania is still the driving force behind increased demands for homes in the market as well as high home construction rate, making Tasmania the third highest in overall economic performance.
Their current figures, including real estate growth, should keep NSW and Victoria on their toes, as Mr. James said, “it’s possible that any one of the three economies could take the top spot” in the next survey.
The ACT takes the fourth spot in economic performance. It ranks second on housing finance but drops three positions on dwelling starts. Construction work is 13.4% above decade averages.
In general, population growth and housing finance drive dwelling commencements or starts. It may also affect retail trade, unemployment, and overall economic growth.
Queensland is now in the fifth position on the economic performance rankings. A growing population in the past three quarters continues to take the state up the rankings. However, the real estate market does not look good.
In Queensland, construction is down by 21.7%, housing finance is down 14.5%, and dwelling starts is down 9.97%.
6. South Australia
South Australia is in the sixth position on the performance rankings but there is little to separate Queensland and South Australia’s economy.
Their economic activity is up by 16.7% though it still has a weak nominal annual economic growth rate.
Also, construction in South Australia is down 2.5%, home loans is down 4.4%, and dwelling starts is down 9.96%. The report shows that South Australian dwelling starts were down by 25.4% on a year ago to 5 and a half-year record lows.
7. Western Australia
Western Australia is still in the seventh position, ahead of Northern Territory. It ranks eight on relative economic growth and seventh on all others.
Nevertheless, Western Australia has the fastest nominal economic growth over the year to March, and annual population growth appears to be at its strongest in almost four years.
Still, indicators for real estate growth are low with construction down by 18.7% on a year ago, housing finance commitments is down by 27.7% on the decade-average, and the state is the next weakest when it comes to dwelling starts.
8. Northern Territory
The Northern Territory lags in all indicators. Additionally, its population shrank by 0.41 per cent over the past year – the biggest decline in 36 years of quarterly records.
Real estate growth seems non-existent with construction dropping by 66.9% from last year. Northern Territory also remains the weakest for dwelling starts which is 60% below decade averages. They also lag behind everyone in housing finance with trend commitments 29.6% lower than its decade-average.
Victoria has clearly cemented its place on the top while Northern Territory and Western Australia continue to face not just economic challenges but true real estate growth. One thing is for sure, it’s the best time to live in Victoria today.
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