ACT has topped the nation in HIA's Housing Scorecard: Thomas Devitt
EXPERT INSIGHT
In less than a year, the Australian Capital Territory managed to overtake Victoria, New South Wales, Queensland, South Australia and Tasmania to take out top spot in HIA’s Housing Scorecard Report.
The HIA Housing Scorecard report presents analysis which ranks each of the eight states and territories based on the performance of 13 key residential building indicators, including detached and multi-unit building activity, renovations, housing finance, and rates of overseas and interstate migration.
The Australian Capital Territory has benefited from steady population growth and a stable labour market when compared to other jurisdictions. This has supported strong demand for new homes and renovation activity, which has been boosted by the HomeBuilder program. Activity in the first home buyer sector has also grown strongly.
This is the first time since 2014 that the nation’s capital has topped the Housing Scorecard.
Victoria’s incredible run of housing market success came to an end in 2020.
Victoria consistently ranked in the top two spots from late 2015 to mid-2020. The COVID recession has seen the state slide from first place into sixth in just six months. This fall is due to a contraction in most of the thirteen indicators.
New South Wales has also fallen to its lowest Scorecard ranking since 2012. New South Wales now has just one indicator, multi-unit commencements, remaining in the top two of the nation.
Tasmania, Queensland and South Australia have remained near the top of the rankings, in second, third and fourth position respectively. These states have endured the challenges of the COVID recession with greater resilience than Victoria and New South Wales.
Tasmania’s economy had valuable momentum heading into the COVID recession, underpinned by a substantial volume of home building. Ongoing state government support for home building, including social housing projects, will provide support for the state’s labour market.
In 2020, South Australia recorded its first quarter of positive net interstate migration flow since 2002. Many of these new residents are quickly putting down roots which has provided a significant boost in demand for new detached dwellings.
Queensland, which already had the strongest renovations sector in the nation, has seen a further surge in renovations approvals. The south eastern corner of the state has continued to attract interstate migration from Sydney and Melbourne which partially offset the loss of overseas migration.
The second last ranking for Western Australia hides the remarkable surge in activity since mid-2020. The extent of the recovery is only just starting to emerge in official data. An improving economic outlook for WA, the federal government’s HomeBuilder program and the state government’s support package for residential building has seen owner occupiers and investors return to the market.
The economic disruption in 2020 reshuffled the Housing Scorecard rankings.
The relative strength of residential building activity across the states and territories will be heavily influenced by the take-up of HomeBuilder and other stimulus measures in 2021.
Thomas Devitt is an HIA economist