MyState Managing Director and CEO, Melos Sulicich joins Dave to discuss  the Tasmanian Economic Update from MyState

MyState Bank has urged the newly re-elected Tasmanian Government to act promptly to implement its election promise to address the housing needs of Tasmanians.

Releasing its latest Tasmanian Economic Update, MyState Bank says with an unsatisfied demand for affordable housing and a growing population, this was a key economic and social issue for Tasmania.

MyState Managing Director and CEO, Melos Sulicich, said Premier Peter Gutwein had agreed that the increase in the provision of affordable housing was a key issue in the recent State Election.

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Mr Sulicich said during the election campaign, the Liberals promised to invest an additional $315 million into social and affordable housing and homelessness initiatives across the State, as well as increase the First Home Owners’ Grant from $20,000 to $30,000 until June 30, 2022 to support first home buyers into home ownership.

“These are positive initiatives, and we urge the State Government to ramp up the investment as a matter of urgency, as well as consider extending the First Home Owners’ Grant scheme beyond 2022.

“As a major provider of housing finance in Tasmania, MyState Bank stands ready to work with the Government to boost funding for home construction and ownership.

“The continuing rapid increase in house values is placing added pressure on Tasmanians seeking a home, with Hobart recording the strongest price increase of all State capitals in the March quarter of 7.6 per cent.

“According to the Core Logic April Housing Market Update, the increases are not confined to Hobart, with Meander Valley / West Tamar recording a rise of 7.8 per cent, the North East 7.7 per cent, Devonport 7.5 per cent and Burnie / Ulverstone 7.4 per cent. Launceston house value rose by 5.8 per cent for the quarter.

“It now takes Tasmanians on average 8.4 years to save the 20 per cent deposit for a home loan, only just behind the time required in Sydney (11.4) and Melbourne (9.8). With property values nationally predicted to rise by 15 per cent this year and Tasmania leading the nation, positive Government action is required.

“Of concern, first home buyers in Tasmania with 33.5 percent of owner occupier loan commitments sit well below the national average of nearly 39 percent.”

Mr Sulicich said despite the budget forecast deficit of $1.1 billion, plus new election spending commitments of more than $1.2 billion, the Tasmanian Government should be in a good position to support housing and employment growth.

“Private sector forecasts predict that the faster than expected national economic recovery, lower than expected unemployment and higher real estate prices will deliver a windfall to the State Government’s fiscal position.

“So, the deficit will be much healthier than predicted, and the election spending promises will be spread over time, so there is no reason to delay implementation of the promised housing initiatives.

“Tasmania’s economy has rebounded following the fall at the peak of the COVID-19 pandemic when investment dipped by 7.9 per cent in the June 2020 quarter.

“The strong growth in the Tasmanian economy over the past five years has seen Tasmania’s population grow as more people moved back to the State and fewer people left. Tasmania’s population reached 541,071 people in the September 2020 quarter, and while overseas migration slowed as a result of national border closures, Tasmanian benefited from the strong move away from Melbourne and Sydney, with a net population increase of 1,164 people.”

Mr Sulicich said while employment numbers and participation rates had returned to pre-COVID levels by February this year, there were still challenges, particularly outside greater Hobart and in youth unemployment. Youth unemployment sat at 16.5 percent at the end of the December 2020 quarter, compared to the national average of 14 percent.

“Higher employment levels in Greater Hobart saw its unemployment rate fall over the past 12 months, however unemployment increased in the rest of the State, particularly in the West and North West areas.

Mr Sulicich said amidst the challenging Tasmanian economic environment, MyState continued to grow and provide positive customer outcomes and returns to shareholders.

“Last financial year, we welcomed 14,500 new customers and importantly. MyState continues to be one of the customer satisfaction leaders in the banking and finance sector with a Net Promoter Score above 40 as at December 2020.”