The state leading Australia economically for the first time
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The state leading Australia economically for the first time

Tripled population growth has turbocharged economic demand, jobs and housing starts

By Bronwyn Allen
Thu, Feb 8, 2024 10:19amGrey Clock 2 min

South Australia is leading the country economically, with a population surge post-COVID boosting economic demand, lowering unemployment and creating a property market boom. Amid a national housing undersupply crisis, South Australia has the best rate of new home building activity and house prices have risen 10 percent in Adelaide and 9 percent in regional South Australia over the past 12 months.

CommSec’s quarterly State of the States report compares the states and territories on eight economic measures: economic growth, retail spending, equipment investment, unemployment, construction, population growth, housing finance and dwelling commencements. The report compares each measure against the long-term trends for each state and territory to determine the out performers.

According to the latest report, South Australia is the best-performing economy and comes out on top in four categorieseconomic growth, unemployment, construction work and dwelling starts.

The states and territories were ranked in the following order:

South Australia
NSW and Victoria (equal second)
Western Australia
Northern Territory

CommSec chief economist Craig James said this is the first time in the 15-year history of the report that South Australia has emerged as Australia’s leading state economy.

“Population growth in South Australia has tripled over the past two years, which is showing up in a strong housing market and overall economic activity,” Mr James said. He commented that Australia’s resilient jobs market and strong population growth are underpinning all state and territory economies, however high interest rates and the cost-of-living crisis have led to a slower pace of economic growth in all of them.

Economic activity in South Australia in the September quarter was 9 percent above its four-year average level of output. NSW was in second spot at 8.3 percent above its four-year average. Trend unemployment in South Australia was 3.8 percent in December, which was 36.5 percent below the state’s decade-average. Tasmania ranked second at 3.9 percent, 32.8 percent below its norm.

South Australia ranked first for construction work, based on the total real value of residential, commercial and engineering work completed in trend terms in the September quarter. South Australia completed just over $4 billion of construction during the period, which was 23.4 percent above its decade average, ahead of NSW with $19.7 billion of work, 18.3 percent above its average.

South Australia is also building new homes at a more rapid rate than any other state or territory. In the September quarter, South Australia booked 2,852 dwelling starts, which was just 2.3 percent below its decade average. Tasmania was second with 703 starts, 3.2 percent below its average. Dwelling starts in the two most populous states in Australia were woefully below their decade averages. In NSW, 10,536 starts were recorded, down 28.8 percent on the decade average. In Victoria, there were 12,666 starts, down 20.7 percent on normal trends.

The downside to South Australia’s economic growth has been a greater rate of inflation. Adelaide recorded the highest annual inflation rate in the September quarter at 5.9 percent, ahead of Perth at 5.8 percent. But this was only slightly above the national inflation rate of 5.4 percent. Last week, the Australian Bureau of Statistics released the December quarter national inflation figures, which revealed a substantial fall from 5.4 percent to 4.1 percent. This was among the reasons that the Reserve Bank kept interest rates on hold after its first meeting of the new year this week.


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Hong Kong has taken a bold step to ease a real-estate slump, scrapping a series of property taxes in an effort to turn around a market that is often seen as a proxy for the city’s beleaguered economy.

The government has removed longstanding property taxes that were imposed on nonpermanent residents, those buying a second home, or people reselling a property within two years after buying, Financial Secretary Paul Chan said in his annual budget speech on Wednesday.

The move is an attempt to revive a property market that is still one of the most expensive in the world, but that has been badly shaken by social unrest, the fallout of the government’s strict approach to containing Covid-19 and the slowdown of China’s economy . Hong Kong’s high interest rates, which track U.S. rates due to its currency peg,  have increased the pressure .

The decision to ease the tax burden could encourage more buying from people in mainland China, who have been a driving force in Hong Kong’s property market for years. Chinese tycoons, squeezed by problems at home, have  in some cases become forced sellers  of Hong Kong real estate—dealing major damage to the luxury segment.

Hong Kong’s super luxury homes  have lost more than a quarter of their value  since the middle of 2022.

The additional taxes were introduced in a series of announcements starting in 2010, when the government was focused on cooling down soaring home prices that had made Hong Kong one of the world’s least affordable property markets. They are all in the form of stamp duty, a tax imposed on property sales.

“The relevant measures are no longer necessary amidst the current economic and market conditions,” Chan said.

The tax cuts will lead to more buying and support prices in the coming months, said Eddie Kwok, senior director of valuation and advisory services at CBRE Hong Kong, a property consultant. But in the longer term, the market will remain sensitive to the level of interest rates and developers may still need to lower their prices to attract demand thanks to a stockpile of new homes, he said.

Hong Kong’s authorities had already relaxed rules last year to help revive the market, allowing home buyers to pay less upfront when buying certain properties, and cutting by half the taxes for those buying a second property and for home purchases by foreigners. By the end of 2023, the price index for private homes reached a seven-year low, according to Hong Kong’s Rating and Valuation Department.

The city’s monetary authority relaxed mortgage rules further on Wednesday, allowing potential buyers to borrow more for homes valued at around $4 million.

The shares of Hong Kong’s property developers jumped after the announcement, defying a selloff in the wider market. New World Development , Sun Hung Kai Properties and Henderson Land Development were higher in afternoon trading, clawing back some of their losses from a slide in their stock prices this year.

The city’s budget deficit will widen to about $13 billion in the coming fiscal year, which starts on April 1. That is larger than expected, Chan said. Revenues from land sales and leases, an important source of government income, will fall to about $2.5 billion, about $8.4 billion lower than the original estimate and far lower than the previous year, according to Chan.

The sweeping property measures are part of broader plans by Hong Kong’s government to prop up the city amid competition from Singapore and elsewhere. Stringent pandemic controls and anxieties about Beijing’s political crackdown led to  an exodus of local residents and foreigners  from the Asian financial centre.

But tens of thousands of Chinese nationals have arrived in the past year, the result of Hong Kong  rolling out new visa rules aimed at luring talent in 2022.


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Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

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