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South Australia has topped the list of the Housing Industry Association (HIA) Housing Scorecard, being supported by state policies aimed at boosting housing supply, according to HIA chief economist Tim Reardon.
The Housing Scorecard report ranked the eight states and territories based on the performance of 13 residential building indicators against decade averages. The scorecard covers detached and multi-unit building activity, renovations, housing finance, and rates of overseas and interstate migration.
South Australia showed strength across a number of indicators of building activity, such as approvals of new work, expenditure on renovations, and activity on the ground, according to Mr Reardon.
“This strong performance will be supported by policy changes announced in this year’s state budget which included a reduction in stamp duty, the release of 25,000 blocks of land, and an investment in public housing stock,” Mr Reardon said.
“Conditions for the residential building industry are undergoing a rebalancing as the market transitions from a record boom to the deepest trough in over a decade in 2024. As the industry progresses through this cycle, building activity in each region is starting to diverge.”
Grabbing second place was Queensland due to strong renovations and multi-unit activity, as it continues to attract large numbers of interstate and overseas migrants that further supports home building.
However, Mr Reardon noted that despite this level of migration, building activity in the state “remains constrained by a shortage of skilled labour”.
ACT took third place on the scorecard report being supported by its multi-units and renovation sectors and the “remarkable return of overseas migrants and students”.
“Western Australia’s home building industry has faced significant capacity constraints. While it ranks fifth in this Scorecard report, the continued inflow of people from interstate and overseas provides its home building industry strong potential moving forward,” Mr Reardon continued.
As a result of the Reserve Bank of Australia’s cash rate hikes, NSW and Victoria slid down the list, impacting the states’ markets more significantly due to higher land costs.
Activity in these regions is expected to slow down more than the rest of Australia, according to Mr Reardon.
“Supporting new home building in these markets by reducing costs, attracting more investment, and improving capacity [is] essential to ensure that an adequate supply of new homes commence construction,” he concluded.
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