Revealed: How Sydney has fallen behind HOBART – as the economy of Australia’s biggest city slows
- New South Wales has fallen behind Victoria and Tasmania in CommSec ranking
- This means Sydney lags behind Melbourne, Hobart in economic performance
- CommSec blamed falling house prices in Sydney for hurting consumer spend
- More people are also leaving Sydney for more affordable housing elsewhere
- Tasmania is benefiting from a huge influx of international students to Hobart
Sydney has now fallen behind not just Melbourne but also Hobart as the city with the best performing economy.
As recently as July, New South Wales shared equal first place with Victoria in the CommSec State of the States measure.
Just six months on, NSW has fallen to third place behind Tasmania.
Sydney has now fallen behind not just Melbourne but also Hobart as the city with the best performing economy. As recently as July, New South Wales shared equal first place with Victoria in the CommSec State of the States measure
This means Australia’s biggest city, Sydney, lags behind Melbourne and Hobart in the economic performance stakes.
CommSec blamed the downturn in Sydney’s property market, since 2017, for the fall.
The group’s senior economist Ryan Felsman said Sydney’s real estate downturn had caused NSW to have the weakest retail spending growth in seven years.
‘We are seeing some consumer caution in New South Wales on the back of that property downturn,’ he told Daily Mail Australia on Monday.
While Melbourne’s house and apartment prices have also fallen during the past year, Victoria’s population has been growing at a stronger pace than NSW .
‘That would be the reason why Victoria complemented by also very strong infrastructure pipeline would be outperforming NSW,’ Mr Felsman said.
Tasmania overtook NSW by having Australia’s strongest performing property market (pictured is the state capital Hobart)
Both Sydney and Melbourne are attracting the vast majority of skilled migrants but more people are leaving Sydney for other parts of Australia, like Brisbane.
‘With housing becoming less affordable in Sydney in particular, certainly there has been a movement in terms of migration interstate back to Queensland,’ Mr Felsman said.
‘We’ve seen Queensland migration around five, six-year highs.’
Victoria is also No.1 by virtue of having solid population growth and a strong job market.
‘Victoria ranks first on economic growth, retail trade, the job market and construction work done,’ the CommSec report said.
Tasmania overtook NSW by having Australia’s strongest performing property market.
Victoria is now Australia’s No. 1 economy by virtue of having solid population growth and a strong jobs market
‘Tasmania is now in second spot with strength in the building and purchase of homes,’ CommSec said.
The island state’s unemployment rate of 6.4 per cent is much higher than NSW’s 4.5 per cent and Victoria’s 4.7 per cent.
Mr Felsman said the influx of international students to Hobart and a resurgence in Tasmania’s tourism industry had pushed up the workplace participation rate as more people flocked to there in search of jobs.
‘Tasmanian population growth is just short of the strongest in 20-odd years,’ he said.
‘With increased population growth, that is putting pressure as far participation is concerned in the Apple Isle and that’s seen a lift in the unemployment rate – more people moving to Hobart in particular.
‘That means there needs to be more jobs created.’
NSW hasn’t been Australia’s best performing economy outright since April 2018.
It shared the top place with Victoria in April this year.
NSW hasn’t been Australia’s best performing economy outright since April 2018. Now it is in third place