Budget Paper No.6 1997/98 Northern Territory Economy
Tabled Paper 3223
Tabled Papers for 7th Assembly 1994 - 1997; Tabled papers; ParliamentNT
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strong growth during the early 1990s. Estimates for 1996-97 indicate residential building activity has gained momentum in response to lower official interest rates, improved business confidence and strong population growth. Residential building approval estimates provide an important leading indicator for construction activity. The estimated number of residential approvals for 1996-97 are up 20% over the previous year suggesting residential building activity should remain buoyant over the short term. The growth in the number of residential units commenced and completed for 1996-97 is moderate compared to the previous year reflecting the relatively low level of approvals in 1995-96. Housing finance data is an indicator of demand for dwellings and provides evidence of demand for newly constructed dwellings as well as existing buildings financed by owner-occupiers. It does not cover the activity of private investors. After declining during 1995-96, the number and value of Territory housing finance commitments increased in 1996-97, continuing an upward trend evident since 1990-91. Current data indicates the level of housing finance may be reaching more sustainable levels. For 1996-97, approximately two thirds of the total number of housing finance commitments were for the purchase of existing dwellings, while 21% of commitments represented the purchase and construction of new dwellings. Refinancing in the Territory featured prominently during the same period, representing 15% of total finance commitments, although the level has been falling over the past few months. Refinancing is expected to abate due to the expectation that official interest rates have stabilised in the short term. Housing finance data for the construction and purchase of new dwellings has shown subdued growth over 1996-97, while building approval figures suggest the opposite (see Figure 11.2). This apparent anomaly is explained by the fact that housing finance data records secured finance commitments for owner-occupiers only and excludes dwelling finance secured by investors. In 0 500 1 000 1 500 2 000 2 500 3 000 3 500 1990-91 1992-93 1994-95 1996-97* Units Houses number Source: Aust. Valuation Office * NT Treasury estimate Residential Property SalesFigure 11.3 Housing and Construction 67