Strong demand for new homes creates economic momentum for Tasmania

Strong demand for new homes creates economic momentum for Tasmania

Tasmania has pipped Australia’s other states and territories in the rankings for economic performance for the first time in its own right since October 2009.

The apple isle is now leading the rankings in the latest State of the States economic report by CommSec, primarily due to above-‘normal’ growth in population and subsequent strong demand for new homes, as well as an improved relative performance of the job market and consumer spending.

The quarterly report looks at eight key indicators including economic growth, retail spending, equipment investment, unemployment, construction work, population growth, housing finance and dwelling starts, and compares the latest readings with decade averages.

According to the latest report, Tasmania ranked number one in four of the eight indicators, being relative population growth, relative unemployment, equipment investment and retail trade, and secured second position in two others.

CommSec chief economist Craig James said the strength of Tasmania’s housing market in recent quarters is now playing out in stronger retail spending and a strengthened job market.

Victoria’s ranking remains strong, but true impact of COVID-19 yet to be realised

Victoria took second place in the overall rankings, coming in first for both the economic growth and construction work indicators.

However, that could be challenged in future reports as a response to the COVID-19 obstacles it’s having to deal with at the moment, according to Mr James.

“Victoria is still very much right at the top of the leaderboard,” he said.

“But it will face challenges in coming quarters given the second lockdown in Melbourne and the impact that has on the Victorian economy.”

The ACT came in at number three, with strength in the housing sector providing momentum for its economy. It landed the number one position for both the housing finance and dwelling starts indicators.

New South Wales ranked third or fourth on most of the indicators, but Mr James said its economy may get “a bit more upward momentum” from some of the infrastructure projects currently underway across the state.

In fifth position, Queensland has seen its most marked improvement in unemployment.

“In terms of relative unemployment, we’ve got Queensland in second position,” Mr James said.

“Given the success that Queensland’s had in terms of the lockdown, what we may see is Queensland improving some economic momentum in coming quarters as well.”

South Australia is sixth in the rankings, losing ground in the last quarter particularly in business investment.

According to Mr James, Western Australia is seeing “a degree of improvement” in some of its rankings.

“In fact, it ranked second in relative economic growth and relative investment,” he said.

“And of course, for both Western Australia and Northern Territory, the strength is very much in the export sector. Things like iron ore and natural gas remain very much in demand by other countries across the globe.”

Economic ranking of vehicle sales steady across the board

The report suggests that if rolling annual new vehicle sales were added to the list of indicators, there would be no change in the economic performance rankings.

The ACT is the only state or territory where annual new vehicle sales are above ‘normal’, up 4.8 per cent on the decade average. It is also the only economy where new vehicle sales are up on a year ago, by 6.8 per cent.

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about home loans

What is a redraw fee?

Redraw fees are charged by your lender when you want to take money you have already paid into your mortgage back out. Typically, banks will only allow you to take money out of your loan if you have a redraw facility attached to your loan, and the money you are taking out is part of any additional repayments you’ve made. The average redraw fee is around $19 however there are plenty of lenders who include a number of fee-free redraws a year. Tip: Negative-gearers beware – any money redrawn is often treated as new borrowing for tax purposes, so there may be limits on how you can use it if you want to maximise your tax deduction.

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

Why is it important to get the most up-to-date information?

The mortgage market changes constantly. Every week, new products get launched and existing products get tweaked. Yet many ratings and awards systems rank products annually or biannually.

We update our product data as soon as possible when lenders make changes, so if a bank hikes its interest rates or changes its product, the system will quickly re-evaluate it.

Nobody wants to read a weather forecast that is six months old, and the same is true for home loan comparisons.

Mortgage Calculator, Loan Term

How long you wish to take to pay off your loan. 

How much are repayments on a $250K mortgage?

The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.

For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

What does going guarantor' mean?

Going guarantor means a person offers up the equity in their home as security for your loan. This is a serious commitment which can have major repercussions if the person is not able to make their repayments and defaults on their loan. In this scenario, the bank will legally be able to the guarantor until the debt is settled.

Not everyone can be a guarantor. Lenders will generally only allow immediate family members to act as a guarantor but this can sometimes be stretched to include extended family depending on the circumstances.

What is appreciation or depreciation of property?

The increase or decrease in the value of a property due to factors including inflation, demand and political stability.

Mortgage Calculator, Property Value

An estimate of how much your desired property is worth. 

Mortgage Calculator, Loan Results

These are the loans that may be suitable, based on your pre-selected criteria. 

Mortgage Calculator, Interest Rate

The percentage of the loan amount you will be charged by your lender to borrow. 

How often is your data updated?

We work closely with lenders to get updates as quick as possible, with updates made the same day wherever possible.

Mortgage Calculator, Loan Amount

How much you intend to borrow. 

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.