subscribe to our newsletter

Victoria leads on loan commitments: CommSec

The latest State of the States report has shown that Victoria leads the country for home loan commitments and construction work done.

CommSec’s State of the States Report April 2021 has revealed that as at February 2021, housing finance commitments were above decade averages in all states and territories, repeating the performance reported in the previous report.

Home loans were above the levels reached a year ago in all economies, which is also the same outcome as in the previous report.

Victoria has emerged in the top spot in housing finance commitments, with the value of owner-occupied home loans up by 87.7 per cent on the long-term average.

The result has followed the state enduring two periods of lockdown in 2020 to curtail the spread of the coronavirus.


Queensland ranked second in housing finance commitments (up 84.2 per cent), followed by Tasmania (up 81.1 per cent) and Western Australia (up 80.9 per cent).

Commitments were up 74.0 per cent in South Australia, up 67.0 per cent in NSW, and 62.5 per cent in the ACT.

The growth in commitments was the weakest in the Northern Territory (up 41.7 per cent on its decade average).

On an annual comparison, Western Australia recorded the highest growth in commitments (up 103.7 per cent), followed by the Northern Territory (up 100.2 per cent), Queensland (up 62.6 per cent), South Australia (up 62.0 per cent), Victoria (up 50.2 per cent), Tasmania (up 46.0 per cent), and NSW (43.6 per cent).

However, the ACT now has the slowest annual growth rate at 30.7 per cent.


Dwelling starts spike in WA

The report also measured the number of dwelling commencements (seasonally adjusted) for the December 2020 quarter compared with decade average level of starts, and found that Western Australia jumped sharply from seventh to second position, with starts now up 18.2 per cent from decade averages.

Furthermore, Western Australian dwelling starts in the December quarter were at five-year highs, and well above the record 36-year low recorded in the June 2020 quarter.

Tasmania remained in the top position for dwelling starts in the December quarter, with starts up 35.3 per cent above the decade-average, while South Australia remained in the third position with starts up 15.6 per cent on the decade average, followed by Victoria (up 11.9 per cent).

On the other hand, dwelling starts in the Northern Territory were 16.1 per cent below the decade-average despite strong growth in starts in the quarter.

The second weakest state for dwelling starts was NSW (down 6.2 per cent), followed by Queensland (down 0.4 per cent), while ACT dwelling starts rose by just 0.5 per cent.

Construction work (total real value of residential, commercial and engineering work completed in seasonally adjusted terms in the December quarter) was higher than the decade average in three of the states and territories, down from four in the previous quarter.

Victoria maintained its leading position, with construction work done 17.5 per cent above its decade-average, while Tasmania posted a 13.4 per cent increase, and NSW recorded a 5.8 per cent increase.

On the other hand, construction work plummeted in the Northern Territory (down 59.6 per cent), Western Australia (down 43.6 per cent) and Queensland (down 23.3 per cent).

Six economies recorded lower construction work annually, but the Northern Territory recorded an increase (33.2 per cent), as did Western Australia (7.4 per cent).

Home prices rise across the country

The report showed that annual national home prices rose by 6.2 per cent over the year to March 2021, but down from the 8.3 per cent rise recorded in May 2020.

Tasmania notched up the strongest growth in home prices (up 13.8 per cent), followed by the Northern Territory (up 12.2 per cent), the ACT (up 12.1 per cent), South Australia (up 9.2 per cent), Queensland (up 8.6 per cent), NSW (up 7.0 per cent) and Western Australia (up 5.2 per cent).

Victorian home prices grew by 1.8 per cent after being the only state to record an annual decline in the previous quarter.

Overall, Tasmania and the ACT continue to lead the economic performance rankings, while Western Australia rose from sixth place in the last quarter to third place, the CommSec report showed.

NSW dropped to seventh place, while Queensland dropped one place to sixth while the Northern Territory has remained at eighth place for the 10th consecutive quarter.

CommSec chief economist Craig James said: “Tasmania and the ACT have firmly held their positions at the top of the performance rankings due to above-average population growth in Tasmania, and a strong job market in the ACT. As a result, it’s unlikely we’ll see any considerable change at the top of the rankings in the near future.

“The main challenge will come from Western Australia, which improved five places on dwelling starts, two positions on both relative unemployment and housing finance and one place on relative economic growth. Despite these gains, Western Australia fell five places on equipment investment and one place on retail trade.

“The Western Australian economy has significant momentum provided by mining and home building. In fact, skill shortages are identified in many building trades.”

Find out more about the top property and home buying trends in your local area at the Better Business Summit 2021. Places are limited so make sure you secure your place at the five-state event asap!

[Related: Mortgage approvals beat decade averages]

Victoria leads on loan commitments: CommSec
Victoria leads on loan commitments: CommSec

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Malavika Santhebennur

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.

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.