Page 1744 - Week 05 - Wednesday, 5 May 2010
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17.5 per cent. So the ACT recorded investment growth of 76 per cent and the economy that came second was New South Wales with annual growth of 17.5 per cent. In racing parlance, may I suggest that it would be ACT first and daylight second.
Perhaps now we should turn to the area of housing finance and see what Craig James, the chief economist at CommSec and author of the State of the states report, has to say here. According to Craig James, housing finance is not just a lead indicator for real estate activity and housing construction but also an indicator of activity in the finance sector. And who do you think came out on top in the area of housing finance? Correct: the ACT—and not only on top by a small margin but, according to the CommSec report, far and away the top position for housing finance in the nation—far and away the top position for housing finance in the nation.
While annual growth for new lending has slowed since June last year, the trend number in the ACT is 28 per cent above the long-term averages. This is another area where it is the ACT first and the proverbial daylight second, with Victoria the next jurisdiction in the housing finance category, with an increase of five per cent above the long-term averages.
I would now like to inform the Assembly about the territory’s performance in the area of dwelling starts. This category measures the trend number of dwelling commencements and compares them with the long-term average levels of starts. The figures are sourced from the Australian Bureau of Statistics. And again, according to CommSec’s chief economist, Craig James, just as the ACT has topped the leader board in housing finance so it has topped the leader board in dwelling starts. Craig James tells us that the number of dwelling starts in the ACT during the December quarter was, to use Mr James’s own words, “a staggering 85 per cent above the decade average”.
Mr James also goes on to say in the CommSec report:
Further dwelling starts in the ACT are currently 82 per cent higher than a year earlier, underpinned by a strong job market, increased land production and rising population growth.
As is the case with other indicators, it is also interesting to look at how far in front the ACT is compared to other jurisdictions. The state running second in this area is Tasmania, which recorded an increase of 33 per cent over the decade average. So there you have it in Craig James’s own words: the ACT has recorded “a staggering 85 per cent increase above the decade average” and the state that came in second, Tasmania, has recorded an increase of 33 per cent.
So the obvious question to ask when looking for an explanation as to the outstanding performance of the ACT economy on so many fronts is, to use the old question by Professor Sumner Miller: why is it so? Well, according to Craig James, the answer is clear: the ACT economy is being driven by solid housing and broader construction activity, and in the case of housing starts this is being driven by the ACT’s increased production of land.
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