Housing finance commitments lifted, CommSec reveals

The November 2022 CommSec State of the States report showed the economic performances of Australian states and territories were supported by strong job and commodity markets at a time of rising interest rates.

The data gathered the latest available information to provide an economic snapshot of each state by observing various key indicators such as housing finance, dwelling commencements, equipment investment, retail spending, economic growth, unemployment, construction work completed, and population growth.

Across home lending, the ACT remained in the top spot with the value of home loans up by 25.5 per cent on the long-term average for November 2022.

This was followed by Queensland (up 20.3 per cent), Tasmania (up 17.9 per cent), and Victoria (up 16.6 per cent), while the NT was now the weakest with commitments 0.5 per cent lower than its decade average.

Commitments in NSW were up 10.3 per cent on the decade average, behind Western Australia (up 11.9 per cent) and South Australia (up 16.5 per cent).

However, on an annual comparison, all states and territories saw a fall in loan commitments.

Similarly, construction work, which refers to the total value of residential, commercial, and engineering work completed, was higher than the decade average for the September quarter, the data revealed.

The report noted construction work done in South Australia was 23.8 per cent above its decade average, followed by Tasmania (up 21.5 per cent).

Victoria came in next with work done 19.1 per cent above the decade average, ahead of NSW (up 3.9 per cent) and the ACT (up 3.7 per cent).

At the lower end of the scale, the NT construction work done in the September quarter dropped 56.3 per cent below its decade average and Western Australia’s construction work dropped 34.9 per cent on the decade average, behind Queensland (down 16.1 per cent).

It comes following the backlog of construction works built up in the past few years, with the Australian Bureau of Statistics (ABS) reporting the total number of dwellings under construction reached record highs in the quarter ended September 2022 (Q3/22).

The ABS data showed dwellings under construction reached a new record of 244,479 in September, an additional 0.6 per cent increase from the record in June of 243,078.

Qld takes home ‘best performing state’

Queensland’s migration boom fuelled by the pandemic alongside a solid job market and overseas demand for energy has pushed it to the top of CommSec’s State of the State economic activity rating.

Across all the indicators, Queensland is now ahead of Tasmania that drops from first to second.

Speaking about the report, CommSec’s chief economist, Craig James, said Queensland was currently supported by solid mining, energy, and tourism sectors as well as solid internal migration.

However, future economic performance for all state and territory economies will depend on the performance of housing and job markets at a time of higher interest rate, he said.

[Related: Record high housing construction in September: ABS]