Stateometer: housing drags on key state

Economic momentum in New South Wales is showing signs of easing although remains above its long-term trend, according to the latest ANZ Stateometer.

The recent slowdown in the housing market of Australia’s most-populous state was the main negative contributor to the NSW component of the ANZ Stateometer.

Population data show a net outflow of interstate migrants, as people appear to be seeking more affordable housing in other states.

"Recent momentum appears to have reached a climax, with house prices likely a contributing factor.” - Cherelle Murphy & Jack Chambers

On the positive side, new entrants from overseas continue to boost all state and territory populations across Australia.

ANZ Research is watching house prices closely given their flow-on effects to the remainder of the economy are extensive. House prices impact household balance sheets, household spending, saving decisions, investor’s appetite for purchasing and the construction of dwellings.


Victoria, ACT, Queensland and Tasmania have been the beneficiaries of the outflow of people leaving NSW, all having seen net inflows of interstate migrants.

Tasmania is in a similar position to NSW – above trend growth, but slowing momentum. South Australia, ACT,Queensland and Victoria all saw above-average growth and building momentum in the three months to March.

The resources-affected west and north of the country demonstrated quite different paths. Western Australia’s economy slipped in the March quarter, with the state in the bottom left quadrant of the ANZ Stateometer. That indicates an economy growing below trend and decelerating.

WA’s population-growth rate has slowed dramatically over the past five years and house prices have been edging lower for three.

The Northern Territory also grew at a below-trend rate but has accelerated relative to the end of 2017. The end of the construction phase of the Ichthys liquefied natural gas project has been a negative for labour market and investment activity.

The ANZ Stateometer is a set of composite indices which measure economic performance across Australia’s states and territories.

The index for each jurisdiction extracts the common trend across 37 economic indicators using principal components analysis. The economic indicators are all monthly data series and cover business and household activity, the labour market, the housing market and trade.

Developments across this diverse country are rarely uniform and we hope these geographically specific indices help you to see through the haze of state by state data and more intuitively piece together the state of the national economy.

Cherelle Murphy is a Senior Economist & Jack Chambers is a Market Economist at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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