NSW remains number one in latest CommSec Report
According to the October 2015 CommSec State of the States Report, New South Wales still remains at the top of the leaderboard, closely followed by Victoria and remains Australia’s best-performing economy underpinned by housing activity.
CommSec’s State of the States report analyses eight key indicators which include economic growth, retail spending, equipment investment; unemployment, construction work done, population growth; housing finance and dwelling commencements.
This latest quarterly report has shown minimal change in rankings compared to the previous report. Both NSW and Victoria hold on to first and second place, but both states are pushing further ahead of the other states and territories.
Behind these two eastern seaboard states sits the Northern Territory and Western Australia which both share third place. Queensland takes fifth spot, followed by the ACT in sixth, South Australia in seventh, whilst Tasmania remains at the bottom of the table.
Upon closer inspection, NSW has top rankings on four indicators which include retail trade, population growth, housing finance and dwelling starts. The lowest ranking it receives is fifth for overall economic growth. The population in NSW is also above long-term averages which is also driving home purchase and construction as well as retail spending. This is good for the economy as more jobs are being created, stabilising the unemployment rate.
For Victoria, the state has ranked second on housing finance, dwelling starts and population growth. It sits fourth on business investment and economic growth. Victoria has also experienced a rising population growth and housing construction. According to the report, “Victoria continues to record the strongest annual population growth and is still second on the differential with the decade-average rate.” The population is also 1.68 per cent higher than 12 months ago, although the growth remains 2.9 per cent below the decade-average level.
When comparing the Northern Territory and Western Australia with NSW and Victoria, it is evident that these two are losing momentum. Housing demand for both NT and WA are not filling the void and the mining and energy sectors are moving from the investment phase to production. The NT does sit on top for three indicators which include construction work done, equipment investment and economic growth, but is eighth on three other indicators. WA also ranks second on three indicators which includes economic growth, retail spending and construction work done.
Queensland has also not experienced much movement in its rankings during this quarter. Its highlights include ranking fourth on retail spending, dwelling starts and housing finance, but it does rank eighth on construction work done.
When comparing Home Prices, NSW unsurprisingly has seen the strongest growth in home prices with prices up 16.7 per cent in Sydney, whilst Melbourne saw home prices up by 14.2 per cent. The only other states that saw a price increase were Brisbane with home prices up 4.6 per cent and ACT 0.6 per cent. The Northern Territory saw the biggest drop in house prices with a fall of -3.9 per cent.
It will be interesting to see what the next quarter’s report will show, as Sydney is now out of peak and experiencing a slowdown of its market, with auction clearance rates falling and property prices also starting to fall. Melbourne is likely to see the highest price growth, whilst Brisbane is the most affordable state out of the three to buy property right now, so we might see Queensland start to move up the rankings in the not so distant future.
Published on 7th of December 2015 by Marty Stanowich