Budget Paper No.6 1997/98 Northern Territory Economy
Tabled Paper 3223
Tabled Papers for 7th Assembly 1994 - 1997; Tabled papers; ParliamentNT
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
addition, housing finance data generally lags behind building approval figures. Australian Valuation Office statistics show substantial increases in residential property sales during the period 1990-91 to 1992-93, followed by more modest levels of activity to 1995-96 (see Figure 11.3). House sales declined over the four years to 1995-96 as a result of relatively high prices and interest rates, encouraging consumers to seek rental accommodation. Unit and townhouse sales have shown steady growth over the three years to 1995-96, reflecting more favourable investment opportunities in units/townhouses and general consumer preferences during this period. Estimates for 1996-97 indicate house purchases are likely to increase significantly due to slower growth in house prices and lower home loan interest rates. Upward pressure on house prices has eased during 1996-97 as the supply of residential land expands in the Palmerston/rural area and inner city allotments become available for residential development. Areas in the Territory that did record strong growth in house sales were Palmerston, Tennant Creek and Alice Springs, while unit transactions were strongest in the inner and northern suburbs of Darwin. Figure 11.4 illustrates the substantial growth experienced in house prices in Darwin over the previous five years as a result of considerable growth in demand for established dwellings. Average house prices in Darwin have increased by approximately 70% since 1991. This contrasts with the weighted average of the eight capital cities which increased by only 10% over the same period. The growth in Darwin house prices, which far exceeds the national average, has been largely the result of very strong population growth coupled with high housing affordability. The rapid growth in house prices has provided considerable incentive for investors seeking capital gains. Over 1996 the rate of growth in house prices declined to 4.4% per annum. This decrease, caused partially by the release of land in Palmerston, Darwin and the rural area, represents a market adjustment to more sustainable growth in the value of established dwellings. 0 5 10 15 20 1991 1992 1993 1994 1995 1996 Source: ABS Cat. No. 6416.0 % Darwin 8 Capitals House Prices (annual % change) Figure 11.4 Housing and Construction 68
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