Territory economic review
NT Treasury, Economic Analysis Division
Territory economic review; Department of Treasury and Finance newsletters; PublicationNT; E-Journals
Date:2001-09; 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
SEPTEMBER 2001 9 TERRITORY ECONOMIC REVIEW www.nt.gov.au/ntt/economic consumer sentiment holding The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 3.6 per cent to 105.3 in August. The fall represents a consolidation following strong growth in the previous four months and could be viewed as a correction. Overall though, the Index remains above 100 as consumers remain resilient despite negative coverage of the global economic environment. HOUSING INVESTMENT Economic and social drivers Demographic, social and economic factors have a strong influence on the demand for residential dwellings and, in turn, upon construction. Factors affecting the demand for housing include: Rate of new household formation; Income and wealth and its distribution; Availability and cost of housing; Price of new dwellings relative to existing dwellings; and Government housing policies. In the short term, interest rates and business and consumer confidence also have a major influence on the building cycle. starting to recover As reported previously, building activity at the start of calendar year 2001 was at unsustainably low levels, well below underlying demand. The QuickStart scheme in the Territory, the Commonwealths extension of the first homebuyers scheme and lower interest rates are starting to have a short term positive impact on Territory residential construction. However, the large oversupply of dwelling stock will take time to absorb, with supply and demand fundamentals largely determining how the cycle in dwelling construction unfolds. as cyclical downturn bottoms The Territorys current cyclical decline in residential construction began earlier than in other jurisdictions, and followed a period of very strong activity driven by high population growth associated with the Defence Force expansion in the Top End. These drivers significantly boosted demand for housing up until early 1999. While early falls in construction activity signalled the end of the Defence build up, the prolonged nature of the downturn reflected over investment in dwellings which led to a significant build up of surplus stock. approvals recovering In original terms the number of residential building approvals increased to 183 in June, driven substantially during that month by the public sector. For the year to June 2001, the number of Territory new residential building approvals fell 28.6 per cent (to 1 098) compared to the previous twelve months. The value of these approvals decreased by 25.1 per cent (to $176.9 million). Nationally over the same period the number of approvals decreased by 32.4 per cent, while the value of these approvals fell 24.1 per cent. Residential Dwelling Commencements (moving annual total) 0 500 1000 1500 2000 2500 1996 1997 1998 1999 2000 2001e 2002f 0 500 1000 1500 2000 2500 number number Total Houses Other residential dwellings NT Treasury Forecast Source: NT Treasury, ABS data
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