New South Wales has solidly held the position as the best performing economy, retaining its top rankings on GDP growth, business investment, retail trade, and dwelling starts and is now top-ranked on unemployment, according to the latest Commsec report, State of the States.
The Urban Taskforce and Property Council of Australia have said the election of Gladys Berejiklian as NSW Premier will boost further confidence in the property industry for a stronger NSW.
According to the CommSec report, NSW is in second spot on construction work - behind Northern Territory - second on population growth, and third on housing finance. Economic activity in NSW is 24.3 per cent above its ‘normal’ or decade-average level of output.
Victoria remains solidly in second spot on the economic performance rankings. Victoria is top-ranked on population growth and housing finance and ranked second on retail trade and business investment.
NSW remains in top spot for dwelling starts with commencements over 81 per cent above decade averages. In addition, in the September quarter the number of dwellings started was 13.2 per cent higher than a year earlier.
The measure used for analysis was the total real value of residential, commercial and engineering work completed in trend terms in the September quarter. In five of the states and territories, construction work was higher than decade averages in the September quarter (previously four states).
Leading the way was the Northern Territory with construction work done 30 per cent above its decade average with activity associated with the gas projects still providing solid support. However construction work in the Northern Territory was down 23.4 per cent in the September quarter compared with a year ago – highlighting the shift in momentum that is underway.
Next strongest was New South Wales, up 22 per cent. Construction work done in both state economies was higher than a year ago in the September quarter.
“NSW remains in top spot for dwelling starts with commencements over 81 per cent above decade averages.”
In six of the states and territories – the ACT, NSW, Victoria, South Australia, Tasmania and Queensland – trend housing finance commitments are above decade averages. But only in three of the eight economies were trend commitments above year-ago levels.
Home Price Growth
The strongest annual growth in home prices was in Sydney (up 15.5 per cent), followed by Melbourne (up 13.7 per cent), Hobart (up 11.2 per cent) and Canberra (up 9.3 per cent). Then there was a gap to the other capital cities.
Election Of Gladys Berejiklian As NSW Premier Will Give Further Confidence To Economic Growth: Urban Taskforce
The election of Gladys Berejiklian as NSW Premier and of Dominic Perrottet as Deputy Leader of the NSW Liberal Party will give confidence to the property industry, the Urban Taskforce said.
“Gladys Berejiklian has an excellent track record in reforming the state’s transport system and as a very effective NSW Treasurer,” says Urban Taskforce CEO, Chris Johnson. “Her election as Premier of NSW will give the property industry and the broader community confidence that the state will continue to grow and prosper under the NSW Coalition Government," said CEO Chris Johnson.
“The election of Dominic Perrotett as Deputy Leader of the Liberal Party is also a good signal that further economic reform will be on the agenda for NSW. Dominic’s handling of the Finance & Services portfolio has been outstanding, including supporting the private sector to provide efficient services in partnership with government agencies.”
“The incoming Premier has said she will review government policies and will continue the drive towards providing key transport infrastructure. It is important that NSW maintains its position as the strongest economy in Australia. There are concerns that the production of new housing is declining. It is absolutely essential that the new Premier continues to keep her eye on the ball and to support continued housing supply to address growing housing affordability concerns.
“While currently housing completions in Sydney are around 31,000 a year, the government’s own targets set by the Department of Planning & Environment, indicate that NSW will need on average around 37,000 a year for 20 years to keep up with demand. The past few decades of housing completions have been well below what is required which has greatly exacerbated housing affordability.
"The last peak in housing supply was in 1971 when Sydney’s population was only 2.8 million, there were 36,000 housing completions so with a population now of 5 million people we should be well above the performance of 36 years ago. If we are only just now returning to the housing production levels of the 1970s we are badly behind and must continue to ramp up supply to catch up," Mr Johnson said.
The Property Council Looks Forward To A Stronger NSW With Berejiklan
The Property Council today congratulated NSW Premier Gladys Berejiklian and Deputy Premier Dominic Perrottet on their appointments and is looking forward to working closely with them to build a stronger NSW.
Property Council NSW Executive Director Jane Fitzgerald said today that there are three key priorities that must be top of the new government’s ‘to do’ list; addressing housing affordability, boosting economic growth, and locking in infrastructure delivery,” Ms Fitzgerald said.
“The baton has been passed and we are already well and truly ahead in the race – NSW is in a strong position to meet future challenges and the new Premier must seize the day.
“Addressing Housing affordability through turbo charging supply must be a top priority – we need at least 725,000 houses by 2036 and we won’t reach this figure unless we unlock more land and reform the planning system.
“Code assessment should be extended and bottlenecks in the planning system need to be removed to ensure more homes can be built more quickly.
“The foreign investment tax must also be reformed – as it stands, it is a tax on housing supply and will push up prices further as it starts to bite. The new Premier should make an immediate contribution to improving affordability by confining the tax to final purchasers not home suppliers.
Ms Fitzgerald said economic growth is integral to our State’s prospects – the new Premier has a strong background in economic management which bodes well.
“With record levels of stamp duty revenue being generated and the state well in the black, a stamp duty cut should be given serious consideration,” Ms Fitzgerald said.
“Stamp duty currently adds about $40,000 to the price of a Sydney home worsening the housing affordability crisis and dampening economic growth.
“We must also ensure that infrastructure continues to be planned for and delivered. The Baird Government made a record investment in infrastructure through key reforms such as asset recycling and this approach should continue.”