The Australian Capital Territory has emerged as the strongest market for housing construction in Australia, the latest report shows.

Releasing its latest Housing Scorecard, the Housing Industry Association (HIA) has reviewed the performance of the residential building market across each state and territory compared with long-term benchmarks against thirteen indicators of activity level.

It found that overall, the ACT was the best performer with a total score of 78.

This was followed by Tasmania, Queensland, South Australia, NSW, Victoria, Western Australia and the Northern Territory.

Across individual indicators, the ACT was the top performer in terms of loans to non-first home buyers, building approvals for multi-unit dwellings, number of multi-unit dwellings under construction, net overseas migration and net interstate migration.

Tasmania, meanwhile, was the best performer for loans to new home buyers, loans to investors, detached house approvals, detached house commencements and the number of new detached homes under construction.

Finally, Queensland, the NT and Victoria took out top spot for value of home renovation work approved, total of private expenditure on home renovations and the number of new home commencements in multi-unit dwellings respectively.

The ACT has now risen from sixth place to top-place over the past year.

When interpreting the report, caution should be observed in that the report measures relative market performance only.

Accordingly, the ACT’s rise in the rankings may reflect more subdued conditions in other states/territories as much as any improvement in conditions within the ACT itself.

Moreover, data suggests that the market within the ACT itself may have softened compared with recent years.

Over the six months to November, 2,285 new dwellings were approved for construction throughout the ACT.

This is above the 2,056 approvals in the six months to November 2019 but is below the 4,437 dwelling approvals and 2,622 dwelling approvals recorded during the boom years in the six months to November 2018 and November 2017 respectively.

With apartments comprising a relatively large 70 percent share of its new homes, meanwhile, the home building market in the ACT appears to be exposed to effect of the shutdown in international migration.

Indeed, HIA cautioned that the ACT’s medium and longer-term outlook depended on its ability to attract back its students, tourists and overseas migrants.

Nevertheless, HIA says the ACT has benefited from both a shift away from Sydney and Melbourne along with strong activity in home renovations.

Its position at the centre of the nation’s public service has also helped in sustaining local employment and housing demand at a time when economic focus has shifted toward public sector stimulus.

HIA Economist Tom Devitt said COVID had altered the rankings across Australia.

He said the relative strength/weaknesses of activity across jurisdictions in 2021 will be influenced by government stimulus measures.

“The economic disruption in 2020 reshuffled the Housing Scorecard rankings,” he said.

“The relative strength of residential building activity across the states and territories will be heavily influenced by the take-up of HomeBuilder and other stimulus measures in 2021.”