According to MyState’s Tasmanian Economic Update, as at 30 September 2016, the broad measure of economic activity, the state final demand, reached an all-time high of $7.45 billion (up 1.36 per cent than the year before).
Household consumption remained the core drive of growth, accounting for around 60 per cent of the Tasmanian economy, with retail sales growing faster in Tasmania than anywhere else nationally in the 12 months to November 2016. Sales grew by more than 6 per cent in the island state, with Queensland coming second with just over 4 per cent growth. New car sales also surged over the past six months, outperforming other states.
As well as strong local spending, tourism continues to bring in money. According to Tourism Research Australia figures, the number of international tourists visiting Tasmania grew by more than 14 per cent to the year September 2016, more than any other state, with a total record number of 1.19 million people visiting the state.
Housing was also contributing positively to the economy, with owner-occupied housing finance commitments outperforming those nationally over the last 12 months. Owner occupiers also have a greater share of Tasmania’s housing market than other states.
Further, Hobart recorded its strongest annual increase in house value (11.2 per cent) since 2005.
According to MyState, the introduction of the First Home Owner Grant in Tasmania on 1 January 2016 may have brought forward demand.
It added that, as grants for new homes are set to reduce from $20,000 to $10,000 effective 1 July 2017, there may be a pick up of approvals prior to that date.
Speaking after the release of the report, MyState Limited chief financial officer David Harradine said the most encouraging aspect of the latest update was that the foundations appeared to be in place for economic growth to continue.
He commented: “Owner-occupier housing finance approval rates in Tasmania outperformed national rates in 2016, especially in the second half of the year, while residential building approvals steadied. The market outlook remains positive, supported by low interest rates, attractive yields and a solid local economy.”
He added: “We need to build on the fundamentals we have in place by increasing our innovation, investment and population to make this growth we are enjoying sustainable for the long term.”
Annie Kane is the editor of Mortgage Business.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.