While New South Wales still ranks top in the national property market, a construction slowdown and a dearth of first home buyers may see the state cede first spot to Victoria in the near future.
These results come from the Housing Industry Association (HIA) Housing Scorecard
released on Friday (14 July) which examined performance across 14 different indicators in each state and territory.
“The East Coast dominated the top rankings again in the latest HIA Housing Scorecard, with the West still affected by the cyclical down-turn,” said HIA’s principal economist Tim Reardon.
“NSW and Victoria have experienced strong population growth, house price rises and growing demand for more affordable housing which has driven the boom in apartment construction in those states.”
Although NSW is in top spot, the state’s recent apartment construction slowdown means Victoria may step into the lead next year, especially with fewer apartments in the pipeline and a stronger population growth, Reardon predicted.
While home price growth in Queensland has been positive, it has not delivered the same strong results as NSW and Victoria to the south.
“Queensland remained steady at number three on the Scorecard. A drop in some key indicators shows a slowing from record highs last year but a healthy outlook for renovation activity is holding up the good result,” he said.
South Australia dropped down the table from 4th spot to 6th.
“With very low population growth, SA is lucky that WA and the NT are experiencing a significant down turn or they would have secured bottom spot,” Reardon said.
“Unlike WA and the NT, which experienced massive investments into housing in recent years and are now on a cyclical down turn, activity in SA is declining off an already low base.”
Low volumes of houses under construction and investment in construction provide a difficult outlook for South Australia with the only positive being sustained activity in the renovations market.
In Western Australia and Northern Territory, high levels of capital investment in equipment to harvest resources are being put to good use. A low exchange rate and improvement in commodity prices may also mean that both states have seen the end of their market trough and a better future outlook.
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