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.
Northern Territory. Residential Building Outlook Residential building activity is expected to remain strong in 1997-98 after achieving more sustainable growth rates during 1996-97. The considerable increase in building approvals for 1996-97 should generate significant residential building activity through 1997-98. Demand for dwellings will continue to be driven by strong population growth and favourable investment conditions. Defence Force relocations are planned to continue to the beginning of the next century, while population growth and net migration are forecast to remain positive. The United States Air Force plans to build two hundred dwellings in Alice Springs over the next two years, this should ensure residential building remains buoyant in the region over this period. Official interest rates were reduced three times by a total of 1.5 percentage points in the second half of 1996 and are expected to remain stable in the short run. Home loan interest rates have been the subject of further cuts, independent of adjustments by the Reserve Bank of Australia. The lag associated with monetary policy movements implies the positive impact on the housing industry of lower interest rates should be realised during 1997. Regions in the Northern Territory which are expected to experience considerable growth in residential building activity are those where demand for housing is strong and the supply of land is not restricted. New suburbs in Palmerston (Rosebery, Bakewell, Gunn and Fairway Waters), residential developments adjacent to the Darwin CBD (Bayview Haven, Cullen Bay, Stuart Park North and the Frances Bay Tank Farm) and Alice Springs will support continuing construction activity. Non-Residential Building and Engineering Construction The incidence of private sector investment in non-residential building is determined by several variables. Existing capital stock, interest rates, predictions of future demand and general business confidence, are all factors which influence decisions to invest. Public sector expenditure on non-residential and engineering construction is directed by non market factors such as providing for the administrative needs of government and meeting the demand for social and economic infrastructure such as schools, hospitals and roads. It is estimated that the value of non-residential building approvals increased 55.4% during 1996-97, compared to the previous year. Growth in private sector non-residential building Housing and Construction 70