Confidence is flooding back into Australia’s home-building industry after a recent boost in construction activity across the country.
CommSec’s latest State of the States report, which provides a quarterly economic snapshot of all of Australia’s states and territories, found that most regions were making a triumphant comeback from the slowdown seen in recent years.
South Australia took out the top spot for both construction work done and dwelling starts, with the state seeing a 22.2 per cent rise in construction work versus the decade average.
Hot on its heels was NSW, which saw 15.9 per cent more construction work this quarter than the decade average, ahead of Tasmania (15.7 per cent), Victoria (14.4 per cent) and the ACT (5.6 per cent).
While Western Australia did not fare well compared to the decade average, the state reigned supreme in terms of yearly growth with a 21.4 per cent jump in construction activity over last year.
This latest construction boom has led to a reignited confidence in the country’s home builders, with the Housing Industry Association (HIA) reporting a potential end to the “sysnchronised cycle of the pandemic” as mid-sized states begin to pull ahead.
In their latest Housing Scorecard, which looks solely at key residential building factors in each state and territory, South Australia once again took the top sport thanks to its capitalisation on home affordability and increase in high-density development.
“South Australia is one of the few markets where first home buyers can still afford a house and land package,” said HIA Executive Director Stephen Knight.
“South Australia has the strongest detached housing sector in the nation with activity remaining resilient to the rise in the cash rate.”
Queensland took out second place in the rankings, trading places with South Australia over the last few years due to a significant increase in overseas migrants and interstate arrivals driving the need for more home approvals.
Mirroring CommSec’s findings, Western Australia also had a remarkable surge up the rankings, with the state capitalising on its affordability advantages and strong economic and employment opportunities to jump from seventh position to third in just one year.
According to Mr Knight, recent efforts across the board to increase higher-density development have helped build confidence that the industry can accommodate this housing demand going forward, but pressure remains on builders.
“The main constraint for Australia’s mid-sized jurisdictions at the moment is simply getting enough labour to meet their housing demands, a constraint which is gradually easing,” he added.
CommSec Chief Economist Craig James said that while economies have slowed in response to higher interest rates, the states have “generally remained resilient,” and lower-ranked states are only expected to improve in the coming months.
“Western Australia remains on top of the leaderboard of the annual growth rates of the eight key economic indicators. WA has the necessary momentum to pass South Australia to attain top spot in coming quarters,” said James.
