To say I was surprised by this data is an understatement. Craig James, Chief Economist for CBA/Commsec put together a comprehensive “State of the States report”. Thank you to the team at Commsec.
How are Australia’s states and territories performing?
Each quarter, CommSec attempts to find out by analysing 8 key indicators: economic growth; retail spending; equipment investment; unemployment; construction work done; population growth; housing finance and dwelling commencements.
The data is then compared to the previous 10 year averages to determine how the growth trend in states and territories for each of the indicators. The report is just a snapshot of 8 key economic measures, it is by no means meant to be used as “Investment research”.
It is interesting to note how the 8 measures feed into one another, especially when telling the story of residential property !
As our clients are experiencing in Brisbane at the moment, it has become increasingly challenging to purchase a property without paying ridiculous prices. Even if you were willing and able to offer the price that will get the deal done, good luck attending an “open home” or making an offer without competing with many , many other buyers.
Queensland is now in top spot with the value of home loans up by 65.5% on the long-term average.
In all of the eight states and territories, housing finance commitments are above decade averages, up from seven economies in the previous quarter. And remarkably, home loans were above year-ago levels in all economies.
The state with the fastest absolute annual population growth is now Queensland. It is indeed a great time to sell in QLD in my opinion.
When looking across growth rates for the states and territories, Western Australia exceeds the national-average on seven of the eight indicators. Next best is Queensland.
I am going to be keeping a close eye on WA’s economy moving into 2021 and beyond. Especially in trade, import and export.
At home in Victoria, our annual population growth of 1.77% is the slowest rate in nine years. We had the lowest growth rate in retail spending being the weakest of all the states and territories. Yet, despite this, Victoria has retained top spot with construction work done 18.8% above its decade average.
This will be interesting to see play out 5, 10 years into the future. I will be looking for trends in immigration/population growth in a post -vaccine world. Not just international immigration but domestic migration as well.
Tasmania was next strongest, 11.2% above the ‘norm’ or decade-average. This makes sense because Tasmania is strongest on the relative population measure, with its 1.12% annual population growth rate 86.4% above the decade average, and prices are still low compared to the mainland.
I’ll be honest, without intervention, I don’t see how 1+1 = 2 with all the data. For example, I don’t see how Victoria’s low retail spending and unemployment plus low population growth is going to sustain all the construction and new dwellings.
A lot of the economic growth is fuelled by the dwelling and construction which was in turn fuelled by homebuilder and government incentives etc.
Soon, looser lending policies will make a debut this year and then it will really be interesting to see what happens then. Then you have the interesting situation with RBA and our PM starting to disagree on monetary and fiscal policy moving forward – a lot to come and we can only wait and see !
I might be missing something, if anyone has any insight please comment below would love to learn more.
Shehan Tambi
Leave a Reply