The latest State of the States report October 2020 has revealed that in seven of the states and territories, housing finance commitments are above decade averages, up from five in the previous quarter.
The CommSec economics team particularly noted that home loans were above last year's levels in all economies across Australia despite the coronavirus pandemic, compared with only three states and territories in the previous report, the report stated.
CommSec’s report assesses the economic performance of each state and territory each quarter by analysing eight key indicators: economic growth, housing finance, dwelling commencements, construction work done, retail spending, equipment investment, unemployment and population growth.
Economic rankings of states and territories in the latest report has revealed how the pandemic recession has affected some states and territories more than others.
To assess home loan trends, CommSec uses the value of owner-occupied housing finance commitments, extracting August data from the Australian Bureau of Statistics, and compares it with the decade average for each respective state and territory.
According to the data, Tasmania has occupied the top position, with the value of home loans up by 75.2 per cent on the long-term average, while the ACT is up 67.3 per cent, NSW is up 43.1 per cent and Victoria is up 41.9 per cent.
Commitments in Western Australia were up 7.8 per cent on the decade average, followed by South Australia (up 36.5 per cent) and Queensland (up 40.4 per cent).
Northern Territory on the other hand posted weak numbers for housing finance, with commitments 9.5 per cent lower than its decade average.
On an annual comparison, Tasmanian finance commitments were up the most (up 39 per cent), followed by the ACT (up 36.2 per cent), Queensland (up 34.3 per cent), Western Australia (up 33.7 per cent) and Northern Territory (up 32.9 per cent).
Victoria posted the slowest annual growth at 23.9 per cent, while South Australia was up 27.3 per cent and NSW was up 28.6 per cent.
Tasmania was also the standout performer across the dwelling starts indicator, driven by “above normal” population growth and relatively low home prices compared with the mainland.
In the June quarter, starts in Tasmania were 9.5 per cent above the decade average.
All other states and territories recorded negative growth for dwelling starts, with Victoria down 1.1 per cent, the ACT down 5.1 per cent and dropping from first to third spot, NSW down 9.8 per cent and South Australia down 10.3 per cent, while Queensland was down 17.5 per cent.
The Northern Territory recorded the steepest decline of 60 per cent, while Western Australia was down 46.7 per cent.
Construction work, which was measured by the total real value of residential, commercial and engineering work completed in seasonally adjusted terms in the June quarter showed that in five of the states and territories, construction work in the June quarter was higher than the decade average.
Victoria has retained the top spot, with construction work done at 27 per cent above its decade average, while NSW was 9.2 per cent above the decade average, and Tasmania was up 6.3 per cent.
The ACT was 5.3 per cent above decade averages, while South Australia was up 4.4 per cent.
On the other end of the scale, Northern Territory construction work done in the June quarter was 67.6 per cent below the decades-average, while Western Australia was down 43 per cent and Queensland was down 23.1 per cent.
Overall, Tasmania ranked first across several indicators, including relative population growth, equipment investment, housing finance, dwelling starts and retail trade, while ranking third or fourth on the other three indicators.
Commenting on the overall results in the report, CommSec chief economist Craig James said: “The coronavirus crisis is causing mixed operating conditions across industries and across states and territories.”
“A key factor driving the relative success in economic performance has been the relative success in suppressing the virus. Suppressing the virus increases mobility, allowing the reopening of businesses and for workers to get back to work.
“Future reports will prove valuable as we track how each state and territory navigates the crisis, especially the recovery phase. State and territory governments have been active in providing stimulus and support measures for their economies. And the federal government and the Reserve Bank have provided significant broader nationwide support for business and consumers.”
[Related: Refinancing up 27% so far this year]
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.