Regional Roundup: Commercial building lifts
Economic perspective

Regional trends: Melbourne regions dominate in terms of population growth, home building and commercial building work. Tasmanian regions have shown the biggest improvement over time in those indicators. Two-thirds of regions have home prices up on the year. While home building has slowed, commercial building has lifted across more regions. Sydney leads in regions with lowest unemployment.

A detailed look at regional economic data highlights the variable economic conditions for businesses.

Regional spotlight

• It hasn’t always been the case, but an array of timely regional economic indicators is now produced – with figures on the job market and building approvals actually available on a monthly basis.

• Indicators include: labour market, building approvals, job vacancies, home prices (monthly); population (calendar year and financial year); business counts (financial year); tourism (various including calendar and financial year); financial information from tax returns (financial year); key construction projects (six-monthly).

• The chief source of the data is the Australian Bureau of Statistics, tourism bodies, the Australian Taxation Office and businesses like CoreLogic.

• Some organisations such as Remplan ( and .id ( collate the information at a local council area and provide information free to the public. These organisations also provide estimates of output at a regional level – gross regional product.

• While there are various ways to dissect the figures, latest data highlights the strength of Victorian regions.

• CommSec analyses the data at the 88 region SA4 level, determining that the data is sufficiently detailed to provide key regional results and still permitting further drilling down into the data by interested observers.
Highlights in brief


• The latest data is available for calendar year 2018. Melbourne-West and Melbourne-Inner have the fastest annual growth rates (3.5 per cent) from Brisbane Inner City and Melbourne–North West (3.3 per cent) followed by Melbourne–South East (3.0 per cent).

• Over the past decade, Melbourne–West grew the fastest (3.7 per cent) from Moreton Bay-South 3.2 per cent) and Melbourne-Inner (3.05 per cent). Sydney-City and Inner South, Melbourne-South East and Ipswich (all near 2.9 per cent).

• When comparing population growth in 2018 with ‘normal’ growth (decade average) the regions that have seen the biggest pickup in growth have been Brisbane Inner City; Tasmanian South-East; Sydney Outer South West and Tasmanian West and North West.

Home building approvals

• Given the size and speed of population growth it makes sense that Melbourne regions dominate home building approvals.

• In 2019 (the year to December), building approvals were the highest in Melbourne-West (11,372); Melbourne-South East (7,646) and Melbourne-Inner (7,314).

• Of the ten biggest building regions in Australia, five were in Victoria, three were in NSW and the other two regions were the Gold Coast and the ACT.

• In the year to December, the fastest annual growth of home building approvals was in Perth-Inner (110.2 per cent) with 512 approvals in one month alone. Then came Central Queensland (32.2 per cent), Coffs Harbour–Grafton (23.7 per cent) and Launceston and North East (18.4 per cent).

• The region growing the fastest compared with ‘normal’ (7-year averages, rather than decade averages due to data limitations) was Hobart (40.6 per cent) from Moreton Bay-North (31.7 per cent), Melbourne-West (27.0) per cent and Coffs Harbour-Grafton (25.1 per cent)

Commercial (non-residential) building approvals

• In 2019, (the year to December), the region with the highest value of commercial building approvals was Melbourne-Inner ($4.6 billion) from Sydney-City and Inner South ($3.5 billion) and Brisbane Inner City ($2.6 billion). Melbourne-West was next at $2.1 billion from Sydney-Parramatta ($1.9 billion).

• The fastest growth of commercial building in the year to December was Sydney-Eastern Suburbs (217 per cent), from Western Australia-Outback (North) (189 per cent) and Cairns (179 per cent).

• The region growing the fastest compared with ‘normal’; (7-year average) was Sydney-Outer West and Blue Mountains (144 per cent) from Cairns (139 per cent) and Sydney-Eastern Suburbs (131 per cent). Also notable in terms of growth was Logan-Beaudesert in Queensland (up 118 per cent).


• The ABS also provide data on employment and participation rates.

• Of the 15 regions with the lowest unemployment rates in the land, NSW had the highest representation with eight regions. Leading the way was Sydney’s Inner West, with the jobless rate averaging 2.1 per cent in 2019. Next was Sydney’s Sutherland Shire with 2.3 per cent and the Baulkham Hills/Hawkesbury region in Sydney’s North West with 2.8 per cent.

• The Far West of NSW and Warrnambool/South West in Victoria were the non-capital city regions with the lowest jobless rates in 2019, both averaging 3.0 per cent.

• Thirty-five of the 87 SA4 regions had an average jobless rate in 2019 of 4.5 per cent or lower.

• Sydney’s Inner West also was the best performing region with the 2.1 per cent jobless rate half of the decade average of 4.2 per cent.

Home prices

• CoreLogic provides regional estimates of home prices on a monthly basis. In January 2020, Melbourne and Sydney dominated the regions with fastest annual growth. Melbourne-Inner East (16.2 per cent); Sydney-Baulkham Hills and Hawkesbury (13.5 per cent), Sydney-Inner West (12.7 per cent); Melbourne-Inner South 11.2 per cent); Melbourne–Inner (10.5 per cent).

• In January, 17 regions had home prices at record highs notably regions in Brisbane, ACT, Adelaide and Tasmania.

• Over the last 5 years the South East of Tasmania had the fastest growth of home prices (8.1 per cent) from Hobart (7.7 per cent) and Mornington Peninsula (7.2 per cent).

What are the implications for interest rates and investors?

• An analysis of regional data provides good reasons to be encouraged about the Australian economy. Population growth is lifting across more regions, especially those in regional Australia. More Queensland and Tasmanian regions are recording faster population growth compared with decade averages.

• While home building activity has slowed in most regions (only 11 per cent higher than 2018), commercial building approvals are above longer-term averages in 60 per cent of regions. And in just over half of the regions, commercial building approvals are higher than a year ago. The regional data gives the Reserve Bank more reasons to conclude that low rates are working.

Published by Craig James, Chief Economist, CommSec