NT government offers cash incentive to boost Territory's population

How much money would it take to convince you to move to the Top End?

The Northern Territory government has put a price on it, offering singles $3000 and families $7000 cash to move north, in a bid to boost its population and economy.

The territory has been left scrambling to fill the massive hole left by the near-complete $34 billion Ichthys gas project.

Operated by Inpex, the project, begun in 2012, was accompanied by an influx of workers and development.

The boom-bust has hit the local property market hard — the NT has experienced the largest drop in house and unit prices across Australia, according to the Domain Group’s June House Price Report.

Darwin’s median house price is now $539,497, down 11.8 per cent year on year. It’s even worse for units, with the median price now $326,126, plunging 17.2 per cent in last 12 months.

Selling agent Brayden Menzies of Real Estate Central NT said the government’s cash incentive, coupled with cheaper property prices, meant there was no better time to enter the Darwin real estate market than now.

“I think it’s a fantastic idea. We’ve just had a massive Inpex development. That’s caused a real boom in Darwin but the workers have left and that’s put a dint in our population,” Mr Menzies said.

“So we’ve had a lot of units and houses built, but now they’ve left there’s no-one in them,” he said.

Property analyst and managing director of SQM Research Louis Christopher is sceptical, however, that cash incentives will improve the prospects of the housing market

“I very much doubt this initiative will prove to be the panacea to Darwin’s property woes. It reeks of desperation,” Mr Christopher said.

“The NT government is far better off focusing on job creation and business incentive schemes in my view. If there is good job creation offering well-paid roles, the people will come,” he said.

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According to SQM Research, Darwin’s vacancy rate sits at 3.4 per cent, which has increased since July last year when the LNG project was winding down. It is the second-highest vacancy rate after Perth, and is higher than the national rate of 2.2. per cent.

Selling agent May Dunlop of Northern Territory Sotheby’s International Realty was more hopeful about the announcement.

“We need a good six to 12 months for this incentive to take effect. Bringing people in to fill those properties is good so we don’t feel as big a pinch … I think it’ll level things out,” Ms Dunlop said.

While house prices are cheaper in Darwin, it’s not cheapest in the country – Adelaide and Hobart are lower. Renting isn’t much better: the median weekly asking rent in Darwin is $500 — a mere $50 cheaper than Sydney. But even then, it’s cheaper to rent in almost every other capital city.

So despite high rental yields for investors, renters like new locals Rob Baird and Kate Needham, who relocated from Townsville six months ago, are not so happy.

For $350 a week in Townsville, the couple could afford a three-bedroom house close to the beach, they say.

Now, they pay $750 rent for a four-bedroom house in an equivalent suburb in Darwin. Mr Baird said extra allowances from government or employer was vital, because, “If you look at the cost of food, living … you’re bleeding cash in a remote area like the Northern Territory.”

“It’s a good place to build skills and build your CV, but in the long term we’re not likely to stay,” Mr Baird said.

And that’s the catch for him. “The government may have cash incentives to bring people here but unless they’re carefully targeted, people won’t stay,” he said.

The government has promised to reward people who stay for five years with a retention bonus equal to the amount they first receive on arrival.

But Mr Baird isn’t convinced it’s enough to keep people in the NT. “The carrot they’re dangling, a $5000 top-up payment is also in addition to the remote living allowance, which you have to realise doesn’t nearly make up the cost of flying to see your family and friends,” he said.

“Cash incentives are minimal in terms of influencing people’s decisions.”

New Territorian Relocation Bonus

Cash payment to eligible applicants to meet relocation and transition costs

Singles: $3000

Couples: $6000

Families: $7000