Master Builders NT forecast 270 homes to be built in the 2023-24 financial year, a fall of 55 per cent

New data paints a disturbing picture of residential construction in the Territory. Read the numbers, and the plan to solve it.

A new industry forecast has revealed the Territory’s home building levels are on track to be among the worst ever, prompting a call for a residential construction incentive scheme.

Master Builders NT forecast only 270 homes will be built in the Northern Territory in the 2023-24 financial year, a fall of 55 per cent on the previous year.

The Territory’s residential building activity is set to hit $302.8m in 2023-24, a decline of 18.2 per cent on 2022-23.

The forecast also questioned the Territory government’s capacity to meet its target to build 11,000 homes in five years.

Construction workers in Maningrida.

But builders are in work because of a surge in non-residential building activity, largely on the back of the Australian Defence Force’s multi-billion dollar infrastructure program.

Non-residential building activity was $863m, a 35.3 per cent increase on the previous year.

Total building and construction activity is tipped to increase by 3.4 per cent in 2023-24 to be $3.229bn and civil and engineering and construction work will hit $2.063bn this financial year, down 2.5 per cent on the previous year.

Non residential building activity.

The study also predicts a decline in commercial construction in the Territory in 2024-25 and 2025-26 despite the strong Defence Force spend.

Master Builders analysis said the forecast highlighted the level of dependency on public investment for the commercial construction industry pipeline, with retail and commercial building and industrial building at unusually low levels compared to public investment from the Territory and federal governments.

Master Builders said private sector investment in construction was low and that without Defence investment the level of commercial-industrial construction would be even lower.

This played out with the report forecasting an 85 per cent increase next financial year in civil construction.

Master Builders NT chief executive Ben Carter said this year’s poor residential results were “a wake-up call”.

Master Builders forecasts of new dwelling starts by type to 2028-29

“Private sector housing demand is one of the key indicators of how an economy is performing and this forecast points to lower levels of confidence, private sector investment and growth in the Territory economy,” Mr Carter said.

“Urgently addressing the chronically low level of private sector housing and home ownership will boost much needed growth in the Territory’s economy and is vital to ensuring that the economic benefits of the forecast $6.2 billion in Defence investment are maximised.

“The billions being spent on defence infrastructure provides a golden opportunity to build a bigger, stronger and more prosperous NT economy, but an increased supply of private sector housing is essential to achieving this.

Chief Minister Eva Lawler wants more housing. Picture: Pema Tamang Pakhrin

“Home ownership should be one of the Territory’s most effective weapons in the battle to increase our population. A mortgage on a house will do more to keep people, including new arrivals, in the Territory than just about anything else.”

He said a residential construction incentive scheme would help overcome some of the other pressures undermining confidence including crime and anti-social behaviour.

“A nation-leading regimen of grants and incentives would help turn the demand tap back on and make the Territory more competitive against other cities in attracting internal migration and overseas migrants seeking opportunities,” Mr Carter said.

Chief Minister Eva Lawler said the government had committed $200m over three years for land development across the Territory.

“Housing and construction are important industries for the Territory and we need more homes to be built,” Ms Lawler said.