Home North: Approaching the First Thousand

Home North: Approaching the First Thousand

The couple bought the unit under the HomeNorth Xtra scheme for $238 000, well under the $260 000 maximum allowed under the plan. They bought an 88% share in the unit, with Territory Housing owning the remaining 12%. “We’ll be looking at buying the Government out as soon as we can,” says Mr Foster, a chef at Darwin’s popular Café Uno.

It was for families like the Fosters that HomeNorth Xtra was created. They are young first homebuyers on a single income looking to get into home ownership. It’s the group least likely to be successful. “We tried to get a home loan at a bank in Sydney and they just laughed at us,” recalls Mrs Foster. “They said we didn’t have enough income or a big enough deposit. The people at HomeNorth were just the opposite.”

HomeNorth Xtra was born on 1 July 2004, when the previous scheme was redeveloped after an independent consultant recommended wholesale changes. The maximum purchase price was raised as was the maximum weekly earnings of the applicant, plus new features were added. After nearly three years of operating under the new scheme, the 1000th loan is expected to be issued before the end of the year. That means nearly 1000 families live in their own homes, families who would not have not had the opportunity to do so without HomeNorth.

It’s a scheme welcomed by the industry. “It’s working the way it was proposed,” explains David Forrest, Vice President and Southern Delegate of the Real Estate Institute of the Northern Territory. “People are using the scheme initially to get a foot in the market. Then, at a later date they are refinancing to take the Government out of it, giving the Government more opportunity to provide it to someone else.”

Under HomeNorth Xtra, not only has the purchase price been increased to $260 000 and the maximum weekly income risen to $1166, but a $10 000 Interest Free Assistance Loan was introduced, designed to help the home buyer with the deposit (which is only 2 per cent) legal fees, loan fees, stamp duty and whitegoods. The Fosters also qualified for the Federal Government’s First Home Owners Grant of $7000.

They also took advantage of the HomeNorth Xtra Shared Equity Loan, where you buy between 70% and 99% of the property, with Territory Housing owning the remainder. After a period of time, when you want to buy the Government out, the share will be sold at the relative portion of the market value at the time of sale.

One of the other attractive features of a HomeNorth loan is the period of repayment. “You can borrow up to 35 years when with most financial institutions you can borrow only up to 25 or 30 years,” says Territory Insurance Office CEO John Tsouroutis. “The longer you borrow, the lower the repayments are. So in the early years when you’re just setting up a home, being able to borrow for 35 years makes it far more affordable than anywhere else.”

The TIO administers the HomeNorth scheme for the Territory Government, and is often the first point of call for applicants seeking HomeNorth advice. TIO customer service agents spend a lot of time educating people in what is often their first house purchase. They define terms like, ‘conveyancing’, what stamp duty means, how to deal with real estate agents and anything else to do with purchasing and financing your home.

However, HomeNorth Xtra is more than a loan scheme. It gives lower income people an opportunity for home ownership that they otherwise could not afford. Only 42% of Territorians own their own home, as opposed to 66% nationally, with home ownership recognised as an important factor in determining long term residence. “If we can encourage more young people to own their own home in the Territory, than hopefully they’ll stay in the Territory,” says Mr Tsouroutis. “Home affordability and home ownership are keys to keeping a more stable population in the Territory.” That means people like the Fosters, who are reportedly not planning on moving anywhere soon.

The Territory Economy: Fast Facts

Economic Growth

The ABS estimates that in 2005-06 the Northern Territory Economy grew by 7.5% to $11.5 billion – by far the highest rate of growth in Australia.

GSP	2003 - 04	2004 – 05	2005 – 06 (Estimated)1	2006 – 07 (Forecast)2
% Change	0.2%	6.0%	7.5%	5.8%

• 
  In 2006, the Territory’s State Final Demand rose by 2.5% compared to the previous year.
  
• 
  In the year to January 2007, the value of Territory non-residential building approvals increased by 75.1% to $418 million.
  
• 
  The rise was driven largely by an increase in the value for entertainment and recreational facilities (mainly due to the approval for the Darwin Exhibition and Convention Centre).
  

Employment

• 
  Employment in the Territory increased by 5.9% in the year to February 2007 to 102 200.
  
• 
  The trend unemployment rate in February was 2.5%.³
  
• 
  In the year to January, the ANZ Job Advertisement Series reports that the number of job vacancies in the Territory increased by 5.4% while falling by 4.6% at the national level.
  

Population

• 
  In June quarter 2006, the Northern Territory’s population was estimated to be 206 688.
  
• 
  The annual rate of increase was estimated to be 1.6%, above the national growth rate of 1.3%.¹
  

Inflation

• 
  In December quarter 2006, the CPI increased in Darwin by 5.0% in annual terms. Nationally, the annual inflation rate was 3.3%.¹
  

Average Weekly Earnings

• 
  In annual terms, seasonally adjusted Average Weekly Earnings per full time adult employee in the Territory decreased by 0.3% to $1091, compared with a national average of $1105.
  
• 
  Over the same period, the Territory’s Labour Price Index rose by 3.5%, compared to 4.0% nationally.¹
  

International Trade

• 
  In the year to January 2007, Northern Territory goods exports grew by 60.1% to $3735 million, compared to the previous year.
  
• 
  Imports increased by 40.9% to $2989 million, giving a balance of trade surplus of $746 million.
  

Property Market

• 
  In the year to December 2006, the median house price in Darwin rose by 12.8% to $370 000; the median price of units increased by 24% to $300 000.
  
• 
  The median house price in Alice Springs rose by 0.4% to 281 000; units were up by 6.3% to $212 500.⁴
  

Retail Trade

• 
  In 2006, retail turnover grew by 6.2% in real terms, outstripping the national rate of 3.4%.
  
• 
  The biggest increases were in recreation goods, food and clothing.¹
  

Economic Outlook

• 
  In the five years to 2010-11, the Territory’s economic growth is forecast to average 5%.
  
• 
  A total of 79% of Territory SMEs remain either ‘fairly’ or ‘extremely’ confident regarding prospects for the next 12 months.⁶
  
• 
  Business confidence in the Territory has exceeded or equalled that reported nationally for 10 consecutive quarters.
  

Footnotes:

1. 
   Australian Bureau of Statistics.
   
2. 
   Northern Territory Treasury.
   
3. 
   The ABS acknowledges there is extreme volatility in monthly Territory labour force figures.
   
4. 
   Real Estate Institute of the Northern Territory.
   
5. 
   Access Economics, Business Outlook, December 2006.
   
6. 
   Sensis Business Index, February Quarter, 2007.
   

Directory: layouts -> download.aspx?SourceUrl= -> publications -> Documents
Documents -> Cover story
Documents -> Inside this issue
Documents -> Cover story
layouts -> Factors on the basis of which import or export duty and other measures in respect of trade in goods are applied
layouts -> Curriculum vitae (updated April 2016 )
layouts -> Periodic Vehicle Inspection for Emissions and Roadworthiness
layouts -> Namas Proposal – nama seeking Support for Preparation Title of Mitigation Action

Download 166.66 Kb.

Share with your friends: