Leading on four of the eight indicators - equipment investment, relative unemployment, retail spending, and dwelling starts - Tasmania continues to lead as the best performing economy in the country.

CommSec's methodology measures eight economic indicators compared with a state's decade average.

Little separated the other states and territories before the Omicron variant emerged according to the report, but following the variant influencing activity across the country, South Australia ranked second overall. 

Victoria came in third, followed by Western Australia, Queensland, New South Wales, the ACT, and the Northern Territory.

CommSec Chief Economist Craig James said Australia's economies are in 'solid shape', well supported by strong fiscal and monetary stimulus.

"Unemployment rates are historically low across much of the nation," Mr James said.

"Labour is in short supply across many industries - a reflection of current COVID-related self-isolation requirements and border restrictions."

While Tasmania held the top position, and is 'likely' to remain on top in the short-term, "much can change over 2022".

"In fact, the Western Australian and South Australian economies have moved up the rankings, performing strongly during the pandemic, with the former benefiting from a surge in iron ore exports and prices, while the latter has benefited from strong government and business investment," Mr James said.

"In differing ways, each state or territory will attempt to ‘live with COVID’ throughout 2022, potentially leading to major changes in the performance rankings."

Queensland set to rise through the ranks, Tasmania to remain on top

Queensland ranked number five this quarter, but some experts have predicted that Queensland's housing boom isn't done yet, which could see the Sunshine State rise through the ranks next quarter.

Chief economist at PRD Diaswati Mardiasmo said that 2022 will see both Tasmania and Queensland's housing markets grow due to three key factors: lower starting prices, housing supply, and rental yields.

"Tasmania and Queensland started off on a lower pricing level compared to NSW and Victoria, therefore there is still room for [prices] to grow," Dr Mardiasmo told Savings.com.au.

"Prices in Tasmania and Queensland are still affordable... which attracts interstate migration and investors."

Dr Mardiasmo said the level of housing supply planned to be built in Tasmania and Queensland is 'much lower' than NSW and Victoria.

"There is still limited new housing supply planned, and yet demand has kept on going and now we are opening international borders," Dr Mardiasmo said.

"Therefore, the imbalance between supply and demand will be felt more in Tasmania and Queensland."

Dr Mardiasmo also said rental yields in Tasmania and Queensland continue to be higher than NSW and Victoria, while vacancy rates continue to be lower.

"Brisbane and Hobart for example have vacancy rates between 1 to 1.5%, whereas Sydney and Melbourne's are 2 to 3%," she said.

"Therefore, rental occupancy is much quicker in Brisbane and Hobart, which means quicker rental income cashflow for investors."


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

What will the next State of the States look like?

As for the future, Dr Mardiasmo said there are trends in NSW and Victoria that could potentially 'change the landscape'.

"There is an increasing amount of people coming back to both Sydney and Melbourne as restrictions lift, companies lift work from home flexibilities and request workers to be back in the office, and more jobs become available," Dr Mardiasmo said.

"We will start seeing an increase in [property] sales in these capital cities and also higher absorption of rental properties."

Dr Mardiasmo said that regional economies within these states are 'growing exponentially' due to infrastructure investment and commercial growth.

"Both NSW and Victoria are 'faster' at this than Queensland and Tasmania, which is why you see a metropolitan-like feel in places that would be classified as regional economies," she said.

Dr Mardiasmo also said that with international borders reopening - though each state has its own rules - Australian economies could benefit in a number of ways.

"In general, [new expats will arrive on] working and study visas, [so] places that have a strong international student appeal will see the biggest impact in terms of a shift in housing demand and supply," Dr Mardiasmo said.

"Regional areas that require workers and can tap into the working visa sector will also see the impact.

"Tourism will benefit as a second recipient, given that there are still limitations on tourist visa entry."

Dr Mardiasmo said there are generalisations that can be made about State of the States, but that there is a different mix of demographics, economic structure, and government policies within each state.

She said this creates a "market within market" situation.

"2022 will be a very interesting year - we will see nuances that we may not have seen or predicted, however some will be quite obvious," Dr Mardiasmo said.

Image by David Clode on Unsplash





Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy