Since Australia’s founding, the experiences of its people have sometimes varied considerably depending on where they lived and worked.
Over time there have been gold rushes in NSW and Victoria, agricultural booms in Queensland, and mining booms in Western Australia. On the other side of the coin, economic crises and recessions have also affected some regions much more than others.
In 2022, things are no different. While the headline figures for the nation’s economy seem to give a pretty good idea of where things stand, when you start to take a closer look at the findings from the various states and territories, some very different pictures can emerge.
To explore some of the differences, we’ll look at three indicators, inflation, rents, and house prices.
Currently, the national rate of headline consumer price inflation is 6.1 percent, and the Treasury is targeting an increase of 7.75 percent by the end of the year. But when you look at the breakdown of inflation levels by capital city, it shows that some cities are already close to the peak predicted by the Treasury and the Reserve Bank.
In the capital with the fastest rising inflation, Perth, the cost of living is already growing by 7.4 percent a year. In Sydney, the capital with the lowest inflation rate, the cost of living is growing by 5.3 percent.
When it comes to inflation, it is as if the different parts of Australia are effectively different nations, with some states like Western Australia and Queensland facing significantly higher pressures, which would arguably in a vacuum lead to more effort to contain them.
Despite just over three months into the RBA tightening cycle, CoreLogic’s national home value index shows a rate of decline consistent with the early months of the global financial crisis and the early fall in prices. from the 1980s.
But amidst this rapidly changing environment, a very different picture has emerged of the various real estate markets in the nation’s capital cities. In Sydney, where the recession has been most pronounced, we are seeing the fastest price drops in almost 40 years.
Meanwhile, at the opposite end of the spectrum in Adelaide, prices have continued to rise despite the RBA’s tightening of monetary policy.
Brisbane showed some resilience for some time after rates started to rise but has now joined Melbourne and Sydney with its property market now falling as well.
Looking around the nation at various real estate markets, it’s very much a case that your mileage may vary. Some markets are showing an impressive degree of resilience amid rapidly rising interest rates, while some suburbs at the more affluent end of town have already seen prices drop more than 25 percent from their peak.
When it comes to how the various capitals of the country are doing in terms of rent inflation, it largely depends on who you ask. According to the ABS, income from capitals at the national level (weighted by population) is currently growing by 1.6 percent in the last year.
When looking at a comparison of the various capitals, a great divergence emerges.
In Sydney and Melbourne, rents continue to fall year after year. While in Darwin, Perth and Hobart they are soaring, with an increase of 11.4%, 9.1% and 6.2%, respectively, in the last 12 months.
However, property data firm SQM Research takes a very different view of the nation’s rental market landscape. Before we go any further, it’s worth noting that SQM and ABS measure slightly different things. ABS measures all rentals together, while SQM measures the sale price of rentals.
According to SQM, demanded rents are rising fastest in Brisbane, up 20.7 per cent in the last 12 months. Meanwhile, in the slowest-growing capital city, Darwin, rents have risen 8.5 percent in the past year. Not that rents growing 8.5 percent anywhere can be considered particularly slow.
The divided states of Australia
Since the start of the pandemic, the experience of Australians in different cities and states has varied considerably. Some states experienced relatively minor impact from Covid beyond border closures and some cities, most notably Melbourne, spent months and months in lockdown.
While the gap in outcomes is not likely to be as pronounced in the coming months and years, different parts of the nation may face considerably different outcomes on the way forward if current trends continue.
Ultimately, at times like this, aggregate national figures may not be as helpful in painting an accurate picture of the challenges facing different parts of the country. But when you take a closer look at the more granular data, things start to become clear that some Australians face greater difficulties than others based on their location.
Tarric Brooker is a freelance journalist and social commentator | @Avid Commenter