The ongoing housing adjustment slowed down economic activity along Australia’s heavily populated east coast in the December quarter.
" Credit tightness, which was a catalyst for changing housing market sentiment in the larger states, has also affected the smaller states.”
The housing component of the ANZ Stateometer weakened in New South Wales, Victoria, Queensland and even in South Australia and Tasmania. In contrast to the three biggest states, house prices in South Australia and Tasmania continued to expand into year-end.
Consumer component deteriorated in all states and territories except Western Australia and Queensland compared with the September quarter.
Such a change suggests to us credit tightness – which was a catalyst for changing housing market sentiment in the larger states which have a high proportion of investors – has also affected the smaller states, which are dominated by owner-occupiers.