Poor outlook for Tasmanian housing market: Westpac

Larry SchlesingerDecember 8, 2020

The outlook for the Tasmanian housing market and the state’s overall economy is poor, according to the latest Westpac Coast to Coast report. 

The report notes a softening of conditions in the first six month of the year, which lowered annual growth to 2%, the slowest of any of the states. 

“Consumer spending all but stalled over the first half of the year. Only South Australia saw a weaker outcome. The consumer spending strike is against the backdrop of labour market weakness, with total employment contracting by almost 1% in the four months to August,” the report says. 

Over the first six months of 2011, the Tasmanian housing market was affected by the twin headwinds of higher interest rates and a slowing of population growth. 

As a result building approvals have softened in recent months, “pointing to further declines over the second half of 2011”. 

“Weakness was also apparent in renovation work, which slumped by more than 10% in the June quarter – albeit following a near 12% rise for the March quarter,” the report notes. 

Another sign of weakness was reflected in new dwelling construction contracted in the June quarter, declining by 1.1% for the quarter and 6.2% for the year. 

According to the report, Tasmania’s economic development is being hampered by a shortage of major new private investment projects in the state and the structural challenges created by the mining boom. 

“The investment outlook remains uncertain. Non-residential building approvals are weak and infrastructure commencements have softened. Business confidence has slumped, to be approaching the lows of late 2008,” the report. 

The recent devaluation of the dollar and expectations of an interest rate cut in November and in 2012 are expected to give some impetus to the market.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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