Territory economic review
NT Treasury, Economic Analysis Division
Territory economic review; Department of Treasury and Finance newsletters; PublicationNT; E-Journals
Date:2003-03; Made available via the Publications (Legal Deposit) Act 2004 (NT).; This publication contains may contain links to external sites. These external sites may no longer be active.
Northern Territory -- Economic conditions -- Periodicals
Northern Territory Government
Northern Territorty Government
MARCH 2003 10 TERRITORY ECONOMIC REVIEW www.nt.gov.au/ntt/economic DWELLINGS INVESTMENT Stimulus from incentives Following several years of negative growth, new dwelling building approvals and commencements picked up in early 2001 following the introduction of the QuickStart scheme and the doubling of the First Home Owner Grant. Combined with low interest rates, incentives received strong support from first homebuyers, flowing through to significantly stronger building activity. stamp duty concession Territory residential construction and property markets have also been supported recently by the increase to first home owners stamp duty concession threshold, with the maximum concession more than doubling to $3 640. Also, a rebate of up to $1 500 is now available to all home buyers for the purchase of a principal place of residence. It is estimated that these initiatives will assist around 2 500 Territory households per year. stronger units approvals The incentives led to a pick up in private sector housing approvals (QuickStart applied to class 1A dwellings), which peaked, fell back and presently is reasonably stable, although at a low level. Nonetheless, year on year private approvals have been strengthening since mid-2002, as growth has shifted from the housing sector to the other dwellings, that is, units sector (see chart). supply and demand evenly balanced Although approvals remain weak in historical terms, the marked decline in vacancy rates indicates that excess dwelling stock is being absorbed, with demand and supply approaching equilibrium. Economic forecaster BIS Shrapnel estimates the housing stock will turn to a deficiency sometime in 2003. With the market appearing poised for a turnaround, a solid and sustainable recovery in dwellings investment is likely to commence later in 2003. housing finance In line with other lead indicators, Territory finance commitments for owner-occupiers also picked up in mid-2001. However, the tapering off in commitments, following the impact of the pull-forward incentives, has been less severe than for new dwelling approvals. less affected by incentives Owner-occupier finance for the construction of new dwellings has gradually fallen from the peak of May 2001, while finance for established dwellings (which typically account for about 80 per cent of owner-occupier commitments) weakened in the second half of 2002, resulting in a steady decline in new finance commitments. recent strengthening in commencements Commencements, already in decline for several years, fell sharply in early 2001 as the extent of previous over-investment became evident. Incentives brought forward activity, which subsequently left a hole in commencements in early 2002. Since then, commencements have strengthened, notably for the lumpy units category. Territory Private Residential Building Approvals* 0 400 800 1200 1600 2000 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 0 400 800 1200 1600 2000 number number Total Private New Dwelling Year ended June Private New Houses Private New Other Residential (units) * original, moving annual total Source: NT Treasury, ABS data