A large bump to housing finance approvals in the ACT in the June quarter has helped the territory hold on to its spot as the third strongest economy in the nation.
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The latest quarterly CommSec State of the States report showed housing finance was up a whopping 19.2 per cent above the long-term in the ACT in the final three months of last financial year.
It showed the ACT also had the second-strongest overall economic growth of all states and territories, at 23.1 per cent higher than the average over the past decade.
The report placed Canberra's economy again behind leader New South Wales and Victoria in second spot, with NSW's key strength a 76 per cent bump to residential dwelling building starts, compared with the 10-year average.
It follows a recent research note from Morgan Stanley suggesting the housing boom, most notably seen in Sydney, had plateaued and would slow down into 2017, potentially putting pressure on the Reserve Bank to consider cutting interest rates.
New RBA governor Philip Lowe recently publicly indicated the central bank may consider cutting interest rates, but gave the idea only a 50-50 chance of eventuating, depending on a range of scenarios playing out over the next six to 12 months.
While the ACT came in fourth place on dwelling starts (up 22.1 per cent), behind NSW, Queensland and Victoria, overall construction work was 5.3 per cent below "normal levels", despite several major apartments developments on foot in the national capital.
Overall, the ACT was top ranked on housing finance, second on economic growth and third ranked on retail trade, unemployment, business investment and population growth.
Almost all states except NSW went backwards during the quarter on business investment, with just 0.8 per cent growth in Victoria, while NSW had a 17.6 per cent bump in the June quarter compared to the long-term average, while the ACT's investment fell 11.1 per cent and Northern Territory was the worst performer after a 43 per cent fall in the past year.
Canberrans had kept spending, with a 11.6 per cent increase in retail trade in the June quarter, compared to the long-term average, behind NSW and Victoria on 17 per cent and 14.2 per cent, respectively.
The report also showed Victoria leading the nation on population growth at 1.94 per cent growth, followed by NSW, QLD and the ACT, all on 1.40 per cent, 1.3 per cent and 1.28 per cent, respectively.
Perhaps reflecting the impacts of the various long-standing impasses over Australian Public Service wages, wages in the ACT were the second-lowest nationwide, at 1.9, beating only Tasmania on 1.6 per cent, while Western Australia led the country on 3 per cent growth in the June quarter.
