NSW tops HIA Housing Scorecard for residential building
According to the latest bi-annual HIA Housing Scorecard report, NSW has knocked WA from the top of the leader board and takes first place.
The Housing Industry Association (HIA)’s Housing Scorecard report has revealed that housing conditions have been improving, particularly for four out of the eight jurisdictions in contrast to three that have been weakening.
The HIA Housing Scorecard reviews and measures residential building using 14 key activity indicators. The most recent performances for each state is then benchmarked against the state’s longer term average with the scoring then aggravated into a scoring system which provides a ranking highlighting the relative strength or weakness of residential building activity in each state and territory.
New South Wales has scored an impressive 85 out of a maximum score of 112, and is now Australia’s strongest state in terms of residential building, whilst Western Australia now lags in second place with a score of 81 after sitting at the top of the table for a lengthy period of time.
It is interesting to note though that in previous years, NSW was one of Australia’s worst performing states according to the HIA Housing Scorecard, but has risen from its fifth place position to second place last year in line with the housing boom that saw property values rapidly rise.
Close behind WA is Victoria which ranks in third position with a score of 77 and has been helped by the rise of multi-unit construction.
In fourth position sits the Northern Territory (61), fifth is ACT (59), followed by Queensland in sixth (55), South Australia in seventh (49) and bringing up the rear is Tasmania with a score of 37.
Tasmania has sat at the bottom of the table for quite some time now, for a period of 10 consecutive quarters.
In spite of Queensland’s position of sixth, the state is continuing to improve with many more new multi-unit developments beginning to commence and construction is really starting to take off. Queensland is now more of a mid-runner, but there is still a long way to go yet.
According to HIA Economist Geordan Murray, “The recovery in Queensland continued to gather momentum. The analysis shows the improvements can be attributed to a boost in multi-unit home building. The improvements lifted the state one place up the league table. To maintain the positive momentum we’ll need to see the recovery broaden its base through improvements in detached house building and renovations activity.”
He also stated that, “NSW continues to rate highly on indicators measuring levels of multi-unit dwelling construction, but it may be a surprise to some that NSW also rates very highly across indicators of detached house building.”
One of the main reasons for NSW moving up in rankings is due to the booming property market which has caused property values to dramatically increase. However in doing so, this has caused affordability issues, especially for first time buyers who are struggling even more to get a foothold on the property ladder. Lending to first home buyers has also been highlighted as a weak spot in the housing market, and NSW ranked in third worst jurisdiction on this indicator.
As the mining boom has come to an end, residential building, particularly across the eastern states has gained more prominence and driving the economic growth across Australia.
It will be interesting to see how each of the states will perform over the next six months as the housing boom in NSW and VIC is expected to slow down; however there is still a lack of supply of housing which needs to be addressed.
Published on 23rd of July 2015 by Marty Stanowich