By Paul Hemsley
The latest quarterly State of the States economic report from the Commonwealth Bank of Australia’s securities arm, CommSec has found that Western Australia has the strongest state economy but still lags in residential development.
The previous State of the States report from CommSec in October 2012 found that New South Wales and Queensland were falling behind in urban development. However this quarter, the biggest problems those states face are economic growth for NSW and unemployment at 6.3 per cent for Queensland.
The Queensland government’s firing of public servants in September 2012 as part of the state Budget has resulted in a parliamentary quarrel over whether the higher unemployment rate was a consequence of the sackings.
For WA, the report cites population growth as a strength, however it is that growth that is impacting the housing sector that is under pressure to keep up with the influx of new residents entering because of the mining boom.
Although housing development is WA’s failing, CommSec’s report found that South Australia is the weakest overall for dwelling starts being at 31.4 per cent below decade averages.
According to the Australian Bureau of Statistics (ABS), WA’s population growth rate increase was at 3.3 per cent, or 78,000 people in 2012. CommSec’s report said the annual growth rate was 3.2 per cent, which was 46 per cent above the national average.
The Director of ABS Demography, Bjorn Jarvis said in the ABS’ December 2012 report that WA continues to have the highest population growth in the country.
"We're seeing Western Australia on the verge of breaking Queensland's record for highest interstate migration, with the state claiming the majority of the migration from Victoria, Queensland and the Northern Territory," Mr Jarvis said.
Despite the housing problem for WA, CommSec’s report observed that the state is the top economic performer in Australia in the areas of construction work, retail trade, population growth, construction work and equipment investment.
Western Australian Treasurer Troy Buswell immediately praised the state’s high performance in the most recent report as “no surprise”.
“Strong population growth, including high rates of migration to the State, demonstrates confidence in current conditions and future prospects for WA,” Mr Buswell said.
Despite the grim report from CommSec about WA’s residential development woes, Mr Buswell revealed that the state government helped 17,171 first home buyers get into the property market in 2012 from grants worth $120 million.
Mr Buswell said this is clear evidence that WA’s property market is gaining strength that will help other parts of the economy.
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