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Territory housing market hits snags
Big rises in construction costs have lead to Territorians taking out fewer, but bigger, home loans, industry experts say.
The Northern Territory Mortgage and Finance Association says there has been a dramatic drop in the number of people buying and selling homes in the past few months.
The association's Tony Schelling says the high returns from the rental market(from: http://www.building-materials-china.com/) and rising construction costs are some of the contributing factors.
He says the fall in the number of people taking out home loans is quite significant, and the lack of confidence in the market is surprising considering the current boom.
"[There's been] as much as 10 per cent fall in the numbers [of loans] in the last couple of months and probably a similar 10 per cent in numbers in the last six months.
"Most recently there's been a bigger down turn, but the real impact of that hasn't been seen yet.
"And conveyances(from: http://www.building-materials-china.com/buy-conveyances/) may say they're down around 20 per cent in the number of transactions they're processing."
The Northern Territory Construction Association's Graham Kemp says the global demand for resources has pushed up the cost of building a home.
Steel has risen by 60 per cent this year, and combined with the rising cost of fuel and other materials, Mr Kemp says building costs will continue to grow.
"Steel is just one component that we are seeing fogging up.
"We're seeing concrete going up, we're seeing plasterboard prices going up - literally all the components that go into building a house [are going up].
"The insidious one is what fuel prices will do."
The owner of a Northern Territory building company(from: http://www.building-materials-china.com/companies/) says new occupational health and safety regulations mean the cost of building a home in the Territory will jump by an another ten percent.
"We've gone through the recommendations and they've had a lot of quotes by installers and suppliers and it could have the potential to add another $40,000 to a good size block constructed single storey house," says Dominic Papalado.
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