First home buyers taking advantage of improved affordability have pushed Victoria to the top spot of the Housing Industry of Australia’s rankings which takes in the residential building conditions across the country.
Despite a slowdown in the volume of new work entering the pipeline, Victoria is still supporting a strong level of building activity, analysis of the latest HIA Housing Scorecard shows.
The HIA Housing Scorecard report, which ranks each of the eight states and territories based on residential building indicators, including detached house building, multi-unit dwelling building, renovations, construction labour force, housing finance, shows Tasmania in second spot.
Tasmania maintained a strong level of detached home construction, which the report attributes to strong migration figures.
New South Wales slipped down to third place, a tie with the Australian Capital Territory, due to a weak renovations sector and backwards interstate migration. More than 6,500 people left New South Wales in the December quarter 2018 than arrived from other states.
While Queensland is seeing historically strong levels of interstate migration.
“If this trend is maintained then an increase in building activity would be necessary,” the report notes.
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^ A decline in state score of more than five is considered to be indicative of momentum, an increase of more than five is considered positive momentum and any positive or negative movement of less than five is considered neutral.
HIA chief economist Tim Reardon said it the first home buyer segment of the market were notably taking advantage of improved affordability of homes.
Home prices and building approvals cooled across the country from early 2018 as credit conditions became increasingly tight.
“The upside of the recent building industry cycle is that as activity levels have synchronised across the east and west coasts – and within each state – it has become easier for policy makers to coordinate policy settings.
“There is a convergence of conditions underway in the building industry as the markets in Sydney and Melbourne cool,” Reardon said, “meaning they have joined the resource intensive jurisdictions with more modest levels of building activity.”