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.
After investing significant resources in housing infrastructure following Self-Government in 1978, the Territory Government has gradually withdrawn from the housing industry placing greater reliance on the private sector for the provision of housing. The Territory Government has undertaken a program to rationalise the supply of public sector housing and consequently the stock of public sector housing has been declining over time. The reduction in public housing assets has been achieved, largely through sales to tenants, facilitated by Government sponsored loan assistance schemes, and conversions (for example, two one bedroom flats into one two bedroom unit). This reflects current Territory Government policy of reducing public intervention in the housing industry as private sector investment has increased as a proportion of total housing expenditure. Current public housing policy is restricted to the provision of low income housing, crisis shelter and Aboriginal community housing requirements. The DHA is also active in the provision of housing for defence personnel. The Home Loan Affordability Ratio is produced jointly by the Real Estate Institute of Australia and MGICA Limited, a specialist mortgage insurer. As shown in Figure 11.5, the ratio of median family income to the average loan repayment (multiplied by ten) for the Territory in December 1996 was 49.9; this indicates that Territory home ownership is the second most affordable in Australia behind the ACT. The home loan affordability ratio in the Northern Territory is significantly above the national ratio despite relatively high house prices. This indicates that high median family incomes in the Territory more than compensate for higher housing costs. Current data shows 20.0% of median family income is required to meet average mortgage requirements; this compares favourably with the national figure of 25.2%. Home loan affordability in the Territory increased over the twelve months to December 1996. Lower home loan interest rates, which resulted in a 9.0% decline in average monthly loan repayments and a 1.0% increase in median family income resulted in a significant increase in the Territory Home Loan Affordability Ratio for 1996. The recent slowdown in the growth of house prices has also contributed to more favourable housing affordability in the 0 10 20 30 40 50 60 70 ACT NT Vic Tas WA SA Qld Aust NSW Source: REIA/MGICA Ltd, December Qtr 1996 Ratio Home Loan AffordabilityFigure 11.5 Housing and Construction 69