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Category: Economic Trends / Business, Economics and Finance

Tasmania housing market leads way, but economy still weak

Monday, 24 Oct 2016 05:08:56 | Bianca Gurra

Demand for agricultural products and a surging housing market are the bright points for Tasmania. (ABC News)

Tasmania has climbed to second-last spot on a quarterly economic report, but still ranks among Australia's weakest economic performers.

Key points:

  • Tasmanian growth in home lending best of all
  • Strong demand for Tasmanian agricultural exports
  • Lack of new housing adds to economic woes

Based on eight key indicators, CommSec's State of the States report has again ranked New South Wales as the country's best economic performer overall, ahead of Victoria and the ACT.

Population and housing growth have helped push Tasmania from the bottom position, with Western Australia taking 8th place as its mining and construction boom winds down.

However, Tasmania is still lacking in key indicators, ranking last in overall economic performance and construction on new houses.

CommSec economist Craig James said it was possible Tasmania could improve its ranking further in the near future.

"There isn't too much to separate the positions from four through to seven, so [it] wouldn't take too much for Tasmania to climb further up the leaderboard over the next couple of quarters," he said.

Housing, agricultural exports strong

Tasmania's annual growth on home lending is Australia's strongest at 10.3 per cent.

Mr James said the growth was partly due to investors and owner-occupiers turning their attention to smaller cities and more regional areas.

"There's more people coming to Tasmania, more demand for homes and [that] creates momentum for the economy," he said.

"What we are seeing is people looking at the high home prices in Sydney and Melbourne and realising they can get better value for money outside those centres."

Tasmania's strong agricultural exports, including to markets like China, was also a strength.

"There is strong demand for our high-quality agricultural products and certainly Tasmania supplies a lot of those in spades."

Tasmania's unemployment rate stands at 6.7 per cent.

AustraliaPlus


 

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