Urgent housing call as NTG budget backs infrastructure boom

A lack of attention to urban housing in the latest NT budget could have serious implications for the government’s infrastructure plans.

Housing in the NT’s major towns and cities remains in short supply as the Territory splutters towards a $40bn economy by 2030.

The Housing Industry Association has joined with Master Builders NT in calling for more urgently needed, urban residential construction to ease pressure on the rental market, deliver safe student accommodation and cater for defence personnel and immigration.

The comments are supported by NT government data that points to an alarming decline in residential construction.

In 2022, residential construction in the NT declined by 7 per cent to $327m, far below the 10-year average of $507m.

HIA executive director Luis Espinoza says a focus on remote community housing should be done in conjunction with an urban housing program. Picture: Julianne Osborne

Public sector housing construction dropped by 12.7 per cent to just $76m and private sector construction was down 5.1 per cent to $251m – far below the 10-year average of $414m.

New house construction fell 11 per cent in 2022 to $178m, down from the 10-year average of $249m and unit and townhouse construction fell 17.1 per cent to $30m, down from a 10-year-average of $149m.

The NT government has medium-term residential developments planned at Holtze and Kowandi but there are no short-term plans for housing construction.

HIA NT executive director Luis Espinoza said the government’s focus on remote community housing was necessary, but should be done in conjunction with an urban housing program.

“The government has funded remote housing and that’s going to happen for the next two to five years and that will keep a lot of builders busy,” Mr Espinoza said.

“Our industry is still very concerned about the people that may come into the Northern Territory to work on these huge infrastructure projects that the government has highlighted, and where they will live.

“We’ve said it over and over again that with more people we need places where they can live and bring up their families.

“If we’re hoping to grow the Territory — make it a welcoming place to live.

The HIA says housing construction is urgently needed in the NT.

“We need to have housing for those people. If we don’t have that we’re just fooling ourselves, and it’s not going to happen.

“This was a business as usual budget. Nothing’s going to change in the next couple of years and we’re basically playing a waiting game to see what happens next. We definitely need more than we’re getting built up here at the moment.”

Mr Espinoza said addressing crime was also a priority.

“Crime and anti-social behaviour is the main concern and cannot be addressed by simply employing more police,” he said.

“The root problem has to be addressed. The residential construction industry is still crying out for skilled people, but considering the crime rate is the worst in the country. It’s definitely a deterrent.”

High inflation means governments are hamstrung from offering new housing incentive packages and Mr Espinoza said the NT government should get on top of the crime problem to free-up resources and help grow the economy.

“There’s crime all over the world but in small communities like Darwin or Alice Springs you see it every day and it has such an impact.”

Master Builders national media and marketing manager Ben Carter

Master Builders NT chief executive Ben Carter welcomed the NT Budget’s capital works and social infrastructure program, saying the government needed to raise housing as a priority.

“One of the things that wasn’t touched on much in the budget was housing and workforce issues, and they’re going to be critical,” he said.

“The issue is you need shovel ready land. The government certainly has released land but it isn’t something consumers and builders can go and buy today.

“We also don’t have a lot of entry level housing, so if we bring in people from overseas to work, they’re not going to be able to access a $700,000 home with three-ensuite bathrooms and two carports.”

Rental Property listings in Darwin fell 14 per cent between December 2021 and December 2022.

Meanwhile, Real Estate Institute NT chief executive Aswin De Silva said Tuesday night’s federal budget tried to deal with big-picture issues around inflation and housing-price pressure.

Aswin De Silva chief executive Real Estate Institute NT

“The federal government attempted to deliver a budget that fights off inflation and helps everyday Australians that are struggling in the context of global economic conditions,” Mr De Silva said.

“The federal budget anticipates that inflation will return to the Reserve Bank’s target band by 2024-25, with inflation to reduce to 3.25 per cent next year.

“I welcome the increase to commonwealth Rent Assistance of 15 per cent to Australians that need it most to help navigate the cost of living crisis and alleviate pressures for Territorians and around 1.1 million Australians

“Commitments to the Home Guarantee Scheme rule changes, recommitment to the Housing Accord, an extra $2bn for the National Housing Finance and Investment Corporation and taxation rule changes for build-to-rent sector are welcome

“A new Household Energy Upgrades Fund for energy efficient upgrades is another positive however the Nationwide Housing Energy Rating Scheme to existing homes requires far more legwork to deliver on the collective quest to achieve sustainable real estate.”

Business leaders react to the NT budget

Industry has gotten behind most of Treasurer Eva Lawler’s first budget but questions around delivery time frames remain.

Just hours after delivering her first fiscal statement, Ms Lawler was on her feet again at Darwin Entertainment Centre selling her document to business and industry leaders.

Chamber of Commerce chief executive Greg Ireland said while budget devils were normally contained in the detail, he welcomed the additional money coming into the economy and the emphasis on infrastructure.

The government has allocated $4.07bn to its infrastructure program in 2023-24, which will include $2.8bn of unspent infrastructure money from previous budgets, which is known as the revote.

NT Chamber of Commerce chief executive Greg Ireland welcomed the budget’s big promise to spend on infrastructure.

“I welcome the GST increases that we’ve seen, but also what’s not included in the budget and how much of potential revenue into the future is still to be recognised there so that’s a positive thing,” he said.

“I certainly think the infrastructure spend being so large is what the Territory needs, and we’re very strongly going to encourage government to … get a bit of a wriggle on when it comes to the actual deployment of that infrastructure spend.

“Getting through that work is one of the key priorities. It’s one thing to announce it, it’s a second thing to deliver it and to make sure we are getting value from it.

“I think that infrastructure is absolutely critical for the projects that are coming up and it certainly does mean that we see some significant activity in the Territory.”

Mr Ireland said some larger Territory businesses would feel the pain of power price hikes not covered by the NT government’s community service obligation top up of $71.7m over two years.

“A point we’ve been making already is the CSO supports the residential and small business customers, the bigger businesses are going to be wearing an increase that’s unavoidable at this stage,” he said.

“We don’t know what the quantum is so we’ll see how it plays out for big business and one we will be encouraging the Territory government to be fully mindful of. We’ve been working with Territory Generation and Power and Water around minimising the impacts on big business.

“It’s certainly something that we need to be fully mindful of, because those businesses contribute a lot, particularly in the construction space – concreting, galvanising, all those things are critical to our construction capability, huge energy users, and it’s going to put the costs up.”

Master Builders national media and marketing manager Ben Carter was impressed with the spending allocation.

Master Builders NT chief executive Ben Carter said the budget was “positive and aspirational” and he welcomed the infrastructure spend because of its flow-on impacts to business, although housing remained an issue.

“The infrastructure spend is going to ensure that thousands of small and medium Territory businesses are really busy going forward,” Mr Carter said.

“The pipeline of work is ambitious and the government needs to work with industry to make sure they have certainty so they can plan but very positive capital works and social infrastructure program.”

Mr Carter said the NT government should maximise the additional work coming to the NT through Defence projects by developing a pipeline of affordable housing.

“The Territory government needs to be in a position to actually maximise those benefits to grow Darwin and sustain the Defence posture in the north after the initial construction phase, and that’s going to take lots of housing and workforce.

“You need shovel ready land, and the government certainly has released land, but it’s not something that consumers or builders can go and buy today.”

David Slama is the Northern Territory Director of the Australian Petroleum Production & Exploration Association (APPEA) said the money would help the drive to net zero.

Australian gas industry peak body APPEA said the budget supported development in the Beetaloo Basin while accelerating the drive to net zero.

NT director David Slama welcomed the investment in critical infrastructure and its benefit to the economy.

“The budget invests in critical infrastructure, supports economic growth and enables the energy transformation to net zero by providing a positive investment environment for business,” he said.

“It provides significant funding for important infrastructure such as new roads for industries like the gas sector to continue to deliver for Territorians, enabling job creation and investment.

“The oil and gas industry supports the additional funding for the Resourcing the Territory exploration program, delivering investment in the NT and supporting new energy supply with all of its benefits.

“New funding for accelerated development of a low-carbon hydrogen industry is also welcome as a key pillar of a cleaner energy future.”

The Association of Mining and Exploration Companies’ welcomed the $6m contribution to implement the Mineral Development Taskforce recommendations.

Chief executive Warren Pearce called for the Mining Remediation Fund to be unlocked but welcomed almost $500m committed to mining industry roads, $9.5m to Resourcing the Territory Exploration Program and $7.3m to modernise business systems at the Aboriginal Areas Protection Authority.

“Today’s budget invests in the future through royalty reform, co-funded drilling, regulatory systems upgrades, and infrastructure,” Mr Pearce said.

Originally published as Urgent housing call as NTG budget backs infrastructure boom