CommSec data shows NSW sliding on economic performance: Chris Johnson

EXPERT OBSERVER

The July 2019 State of the States report on economic performance by CommSec has New South Wales slipping to second spot after Victoria.

New South Wales has led the economic performance of Australia’s states as measured byCommSec for some time but has now slipped to second spot.

While NSW measures well on dwelling commencements at 14.9 percent against a decade average a detailed look at the figures indicates that Victoria is doing better on this measure.

In the July quarter Victoria commenced 15,899 dwelling commencements while NSW, which is 20 percent bigger, only produced 14,735 commencements.

On top of this, dwelling approvals in NSW and particularly in Sydney have been falling fast. Year to date dwelling approvals for Greater Sydney in May 2018 were 53,665 but this has fallen to 41,365 by May 2019.

This 22 percent drop in one year seems to be continuing due to slowing industry confidence, lending restrictions by banks and a slow planning system in Sydney.

We are also concerned that the NSW Government will lift the cap on local infrastructure levies from July 1, 2020 and that this could add up to $70,000 extra to the cost of housing.

The Urban Taskforce believes the current slide in economic performance in New South Wales, asshown in the July CommSec data, may continue with big drops occurring in housing approvals in the state, and particularly in Greater Sydney.

CommSec measures dwelling commencements that come from approvals in the past and the slowing housing approvals will inevitably flow intoreduced dwelling commencements in the months ahead.

The Urban Taskforce also believes that recent planning decisions by the state government to not approve the Ritz Carlton Hotel in Pyrmont or the St Leonards South medium density housing proposed by Lane Cove Council, are sending signals to the development industry that maintaining the existing character of neighbourhoods is more important that supporting new development.

CHRIS JOHNSON is the Urban Taskforce CEO