NSW Australia's Strongest State In Housing Sector Conditions


The Housing Industry Association (HIA) has crowned New South Wales as Australia's strongest state in their "Housing Scorecard". The Housing Scorecard provides a half-yearly review of residential building conditions in each state and territory.

“The east coast dominated the top rankings again in the latest HIA Housing Scorecard, with the west still affected by the cyclical down-turn,” HIA Principal Economist Tim Reardon said.

Across a range of activity indicators, the most recent performance in each state is benchmarked against the state’s longer term average. This analysis is aggregated in a scoring system which provides a ranking that highlights the relative strength or weakness of residential building activity in each state and territory.


“NSW and Victoria have experienced strong population growth, house price rises and growing demand for more affordable housing which has driven the boom in apartment construction in those states," Mr Reardon said.

According to the scorecard, low interest rates, the clearing of a backlog in local demand built up over a decade or more, foreign investor demand associated with Australia’s exchanges rates and strong population growth have resulted in a housing price boom in Sydney which has supported activity throughout the NSW economy.

However, HIA said the cycle has peaked; reduction in building activity in the March quarter 2017 (-17%) was as a consequence of a significant decline in unit investment (-20.2%).

The Sydney market has seen record numbers of apartments under-construction over the past two years and as these units reach completion, approvals show that these levels of building will not be sustained.

A growth in the number of first home buyers in the market, and a reduction in the size of a first mortgage in the March quarter 2017, show that these apartments are the entry point to the housing market for many young people. This growth in first home buyers is from a record low level and is hopefully the start of an upward cyclical trend.


First home-buyers have been hard to find in the NSW market and they remain just a small fraction of the market (8.4%) due to the affordability challenge, in particular in Sydney.

“NSW may have retained top spot but with the slowdown in apartment construction predicted there is every reason to expect that Victoria, which has had fewer apartments in the pipeline and stronger population growth, may take over the top spot in 2018.

“Queensland remained steady at number 3 on the Scorecard. A drop in some key indicators shows a slowing from record highs last year but a healthy outlook for renovation activity is holding up the good result.

“South Australia dropped down the table from 4th to 6th. With very low population growth, SA is lucky that WA and the NT are experiencing a significant down turn or they would have secured bottom spot," he said.

“Unlike WA and the NT, which experienced massive investments into housing in recent years and are now on a cyclical down turn, activity in SA is declining off an already low base.”

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