Resources fuelling Top End confidence
Investors see a $30bn reason to be confident in the Northern Territory as the state’s massive Ichthys LNG project gets the green light.
T he Top End is the tops when it comes to real estate buyer confidence as the Northern Territory’s resource riches appear to be reeling property investors back into the market. The headlines have gone to the $30bn set to flow as a result of Japanese company Inpex green-lighting the Ichthys LNG development, and other good news is on the horizon.
“You’ve got to remember that the NT has a relatively small population and that any projects of national significance have a larger impact on the territory than they do in Queensland or Western Australia,” says Brendan Dunn, NT Director for Property Council Australia. “Inpex is certainly the one that has been identified, and that is probably the largest single catalyst for the boost in confidence.”
Over the last quarter of 2011 a Property Council-ANZ survey found confidence in the territory up more than 15%, putting NT’s numbers far above any of its larger fellow states even before the deal had the official green light. Dunn says investor appeal will continue to grow given the enormous economic impact of the Ichthys development, which is expected to add as much as 18% to the economy during its 40–year run.
NT buyer’s agent Tod Peterson says he sees the investment in the territory already paying off.
“There’s been a lot of positive movement in the bottom end of the market from August up until now, especially around the $500,000 mark.
“But in the middle of last year, there was no market. It just wasn’t there. There were just no buyers basically. Everybody was sitting on the fence waiting to see what was going to happen.”
But Property Council’s Brendan Dunn says it is important to note that the Inpex development is just one of the good things that are happening in the territory. “Aside from that, there is quite a number of other resource projects that are in the developmental stage or going through the pre-development stages that will have significant impact on the territory economy.
“The economy’s expected to grow at about 8% per annum for the next decade.”
In addition to the monstrous LNG plant development in Darwin, the Top End is seeing dozens of new mining projects moving forwards, huge infrastructure investments and the expansion of Australian and US military presence.
Dunn sees significant long-term potential growth for NT’s economy and the residential market as supply struggles to keep up with demand spurred by the massive resource and other investments.
“Some of the contractors will be around for three years but some will be around for up to 30 years. So that is the long-term effect, and what happens when you have oil and gas boys co-locating and the synergies that that produces. It makes it more economical for others to enter the market in that area down the line.”
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