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Residential Building: NSW Dethroned In State Rankings

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The Housing Industry Association has released the organisation’s bi-annual Housing Scorecard. The report presents a unique analysis of the performance of the residential building industry in each state and territory and provides an objective ranking of each jurisdiction’s performance.

“There were over 220,000 dwellings commenced in Australia during 2015 – a new annual record. However, there were significant divergences in conditions for residential building around the country. The eastern seaboard states have been the strongest performers, the mining states are sliding down the order, while South Australia and Tasmania are facing the most challenging conditions,” said HIA Economist, Geordan Murray.

“There is little to separate the top two ranked states, but it is Victoria that has edged out New South Wales to take the top spot. With nearly 70,000 dwellings commenced in 2015, it is not all that surprising that Victoria was number one, but Victoria also ranked as the strongest market for renovations.

“Western Australia is off the pace of the top two states, but still ranks third. The high ranking for WA belies the challenging conditions emerging for residential building, as evidenced by nearly eighteen months of falling home prices. The state’s overall ranking is propped up by strong performances in indicators of residential building that is already underway. The leading indicators highlight the recent deterioration in conditions and the prospect of weaker conditions ahead, which the HIA has been warning of for a considerable time.

“Queensland is not performing as strongly as Victoria and NSW, but the housing recovery is being tempered by the downturn in the mining and LNG sectors. While residential building conditions have improved in the south eastern corner of the state, the key regional markets to the north - which were leveraged to the mining and LNG projects - are now feeling the pinch.

“Tasmania and South Australia round out the league table ranking seventh and eighth, respectively. However, the conditions in each state are quite different. A nascent recovery is underway in Tasmania, albeit from a particularly low starting point. Conditions in South Australia are already weak and the risks are skewed to the downside.

“The geographic disparities in residential building conditions evident in the latest Housing Scorecard, and disparities across housing markets more broadly, represent a substantial challenge for policy makers. With housing related policies high on the agenda in the federal election campaign, it is important that any new measures are assessed in the context of regional markets experiencing widely divergent conditions,” concluded Mr Murray.
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Five Squared marketing director Ashley Lewis who develops housing estates in outer Melbourne suburbs such as Clyde North and Doreen commented on the strong demand for house and land packages in Melbourne’s growth areas.

"We have seen remarkable interest in our Clyde North development Bloom having sold out all stages before the titles were issued – a very rare occurrence for premium land developments. Similarly, we’ve pre-sold over 95% of the two stages currently under development of our project Katandra Rise in Doreen," Mr Lewis said.

"Many buyers are coming to Melbourne’s outer ring looking to get a foot into the property ladder and start building a home to raise their family. Nowhere else in Melbourne can you affordably live in a new home so close to everything – great parks and wetlands, quality schools, major shopping centres, and existing transport infrastructure.

"Pent up demand is extraordinarily high but continuing regulatory hurdles and delays are significantly restricting developers’ ability to provide adequate supply to the market in a timely manner. Land prices on Melbourne’s urban fringe are rising. It’s still more affordable to buy a house and land package here than in the other major cities." 

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Article originally posted at: https://https://theurbandeveloper.com/articles/victoria-dethrones-nsw-top-state-rankings