Northern Territory residents went to the polls on 24 August, electing the party that campaigned on tough-on-crime policies and the nation's largest first home buyer and home builder grants.

The Country Liberal Party (CLP) unveiled its proposed HomeGrown Territory Program in May, promising that, if elected, it would deliver first-time buyers who build a home a $50,000 grant.

Those buying an existing home were promised a $10,000 grant.

Currently, first-time buyers purchasing a new home in the territory can access a $10,000 grant and those buying an existing property miss out.

In a rare twist, it's not just first home buyers poised to benefit from the program.

It also includes the FirstStart New Home grant, expected to provide $30,000 grants to just about anyone who builds a new home in the Northern Territory.

"HomeGrown Territory will get people out of the rental cycle and into home ownership," CLP leader Lia Finocchiaro said on announcing the program.

"This is a bold plan that will help boost our population, retain skilled workers, and stimulate construction."

None of the proposed grants have a cap on build price, meaning buyers turning to them can spend as much or as little as they like constructing their home.

The only catch is they must live in the home being built for 12 months after it's constructed.

The proposed grants would be the largest on offer to Australian first home buyers, by far.

Queensland's first home builder grant, which was doubled to $30,000 last year, pales in comparison.

See also: State-by-state guide to First Home Owner Grants

It's also worth noting that the Northern Territory's outgoing Labor party campaigned on an even beefier $60,000 first home owner grant.

Could grants of $30k and $50k halt the NT's housing crisis?

Housing construction has slumped in the Northern Territory, recording the worst decline of any state or territory over the last 12 months, PRD chief economist Diaswati Mardiasmo told Your Mortgage.

Meanwhile, first home buyers appear to have gone cold on the territory, with around 150 people climbing onto its property ladder in the March quarter, she notes.

"From a new housing supply perspective, the Northern Territory is the worst off," Dr Mardiasmo said.

The grants proposed by the CLP could feasibly help drive demand for residential construction, particularly given the lower cost of building in the territory.

"Building in Darwin is actually quite affordable compared to other capital cities," Dr Mardiasmo said.

"So from a construction cost perspective, an incentive of $50,000 is very attractive and could assist quite a bit."

Though, there is one notable roadblock to a Northern Territory building boom.

"The other side of this, of course, is that you need land to build a home," Dr Mardiasmo continued.

Just 83 new land lots are planned for Darwin in 2024, according to PRD data, far fewer than are expected to be made available in other capital cities.

"Unlocking land, as well as building approvals, lie in the powers of the local councils and state government," Dr Mardiasmo said.

"You need both hands to clap to be able to solve or address the housing shortage issue in any significant manner."

Could the plan drive NT house prices higher?

"Traditionally speaking, first home buyer grants have resulted in higher house and land prices, due to an increase in demand," Dr Mardiasmo said.

That's even more so the case in 2024, due to the ongoing housing crunch, she said.

"Using that logic, these grants should technically result in higher house and land prices."

Darwin's median dwelling price rose 2.3% over the 12 months to August to around $507,000, according to CoreLogic figures.

That puts its annual house price growth in a similar camp as that of Melbourne (+0.2%), Canberra (+1.7%), and Hobart (-1.2%).

"From a median house price pattern perspective, the Northern Territory is following a similar track as the rest of the country," Dr Mardiasmo said.

However, she noted property in the territory capital hasn't kept pace with some other capital cities, such as Sydney, Adelaide, and Brisbane.

This is due to a number of local factors, such as a drop in the number of buyers purchasing in the territory, slow wage growth, and a lower level of interstate migration.

"With fewer buyers and less demand, even though there is a lack of housing supply, property prices will not travel far," she said.

Grants such as those proposed by the CLP could very well lead to more market activity, but that relies on people taking advantage of the cash offers.

"150 first home buyers played in the Northern Territory's market in the March quarter of 2024, 201 in the March quarter of 2023, and the highest was 234 in the December quarter of 2023," Dr Mardiasmo said.

"If this policy results in the number of first home buyers returning to, or increasing beyond, December quarter 2023 figures, then there's a higher chance of house and land prices increasing.

"However if it doesn't, then it won't."

Image by Frans-Banja Mulder on Wikimedia Commons

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