State of the real estate states
When it comes to economic performance, it is traditionally the resource states that are the strongest on many key indicators, but this has changed in the latest CommSec State of the States report.
For the first time in three years, Western Australia has been relegated from the top spot - this time by New South Wales, due to its strong residential property and business investment markets.
Housing market dominates
NSW has emerged as the best state for population growth and real estate dwelling starts, while also performing well in terms of home financing, unemployment and business investment.
These statistics were compared against each state's average for the last ten years, and CommSec have noted that as economic focus moves from resource construction to resource production, other economies are pushing ahead in strength. This includes the housing market, which has been a major factor in NSW emerging as the dominant economy for this quarter.
Home prices in Sydney have risen by 14.3 per cent during the last 12 months, which is well ahead of the rest of the country. NSW home building starts were also markedly strong, at 36 per cent higher than the decade average. The yearly population growth for NSW is also the fastest it has been in five years.
Outlook for the future
With this local real estate market currently outperforming the rest of the country, it is important to look ahead to the future of NSW property. The Housing Industry Association (HIA) and RP Data Residential Land Report has predicted a strong land sales result for the 2014/2015 financial year, which bodes well for those hoping to invest in real estate.
Tim Lawless, research director for RP Data says the land sales result should flow on to positive figures in other aspects of the housing economy.
"A rise in land sales implies a rise in detached housing construction about six months down the track which in turn provides a substantial multiplier for the Australian economy; more jobs, more building materials, home furnishings, appliances and white good sales," he stated in an October 23 release.
Mr Lawless is unsure if this will emerge into a trend, but regardless, the strength exhibited by the NSW real estate market should provide confidence for anyone seeking a good real estate investment.
For long term management of property prices, the HIA's Harley Dale has called for policy changes to be made to housing supply, which could see more affordable housing.