Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT
Tabled by David Tollner
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.
Department of the Treasury and Finance
100 Residential Property Markets 2013-14 Budget Since 2001, the Territory economy has expanded significantly, driven by the development of a series of major projects, primarily in the mining and manufacturing sectors. This has led to increased levels of migration to the Territory largely for employment purposes. As a result of the increase in population and economic prosperity, dwelling prices escalated rapidly, especially in the Greater Darwin region, up to 2010. In 2010 and 2011, most property markets in the Territory weakened, with a substantial reduction in sales activity and decreases in prices in some markets. Factors contributing to the declines in Territory property markets included slowing economic and population growth following the completion of several major projects, conservative consumer behaviour and a reduction in the availability of finance in the wake of the global financial crisis (GFC), and previous pulling forward of demand into 2009 through temporary increases to Territory and Commonwealth home ownership incentives designed to stimulate housing markets following the GFC. In 2012, property markets in a number of centres recovered strongly, with the number of houses, units and land sales up substantially. Median house prices increased in Greater Darwin and TennantCreek, up by 12.0percent and 11.8percent respectively as at the Decemberquarter2012. House prices in AliceSprings and Katherine declined over the same period. The rebound in Greater Darwin can be attributed to increased confidence in local property markets following the commencement of several major projects and strong demand for housing as population and employment growth strengthened over the year. Property markets have also been supported by interest rate reductions since late 2011, which have reduced the ReserveBank of Australias (RBA) target cash rate by 175 basis points to 3.0percent, the lowest level since the GFC in September 2009. Government Housing Policies and Initiatives The Territory Governments Real Housing for Growth initiative aims to increase housing supply and ease housing cost pressures to support the attraction and retention of key workers in the Territory. The plan aims for 2000 new homes to be built across the Territory over the four years to 2016-17, using a combination of home ownership incentives targeted at the construction of new dwellings, and rental initiatives including partnerships with private developers to build and own new rental dwellings, with the Territory Government holding a ten-year head lease over the dwellings. HomeBuild Access is part of the Territory Governments revised home owner incentive package and is targeted at the construction of new dwellings. HomeBuild Access offers two loan products, a low deposit loan and a subsidised interest loan, both of which have a purchase price limit of $550000 for dwellings with three or more bedrooms and $475000 for dwellings with one or two bedrooms. The First Home Owners Grant (FHOG) provides a grant of $12000 to eligible applicants who are purchasing an established dwelling in the GreaterDarwin area, or $25000 for applicants who are purchasing or constructing a new dwelling in the Greater Darwin area or purchasing a new or established dwelling elsewhere in the Territory. The eligibility for the higher Home Ownership Initiatives