SA leads property market rankings

HIA senior economist, Tom Devitt, said the home building prospects in South Australia have strengthened in recent years, driven by favourable shifts in economic conditions and policy settings.

He said the state’s top housing ranking was linked to multiple factors, such as population growth, first-time home buyer activity, and a rise in investor loans.

“South Australia has been supported by elevated numbers of overseas arrivals, and far fewer local residents leaving for other states than in recent history,” Devitt said.

“This has helped South Australia produce the strongest detached housing and renovations markets in the nation.

“First home buyers have been more active in the South Australian market than any other. The only time they were more active in the state was during periods of stimulus associated with the GFC and the pandemic.”

“Investors have also returned rapidly to the South Australian market, with the number of investor loans issued surging back to record highs,” he said.

Additionally, the HIA said South Australia’s policies have been boosting the property market and helping buyers, sellers, and constructors alike.

“Recent analysis by HIA has shown that policymakers in South Australia arguably have the best understanding of the problems facing housing supply and the actions required to improve the situation,” Devitt said.

“The complete and uncapped removal of stamp duty for first home buyers building or purchasing a new home in South Australia is also one of the best housing policies in the country.

“It would be desirable to see the policy take the next step and be extended to all new home buyers.”

Devitt said the South Australian government’s Housing Roadmap was an additional indicator that the state understood the housing crisis, as it introduced targeted planning reforms, faster development approvals, skills investment, and a strong policy emphasis on land release.

“This has South Australia well placed in terms of medium-term housing supply,” he said.

Following strong population growth and affordable housing, Western Australia and Queensland completed the top three in the HIA Housing Scorecard rankings, scoring 79 points and 75 points respectively.

Victoria and NSW followed suit at 57 points and 56 points respectively, rounding up the top five.

“New South Wales and Victoria have slipped in the rankings as land costs, punitive taxes, and obstructionist regulations weigh on home building activity and drive many residents interstate,” Devitt said.

The HIA scorecard also showed that the Northern Territory, the ACT, and Tasmania had more progress to make, recording all of the points below 50, which Devitt attributed to residents moving to other states as land costs have become unaffordable.

“This is why the outlook for home building across different markets is going to depend on the ability of state policymakers to bring affordable shovel-ready land to market and help reduce costs and regulations on home buyers, investors, and the industry,” Devitt concluded.

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