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12 Cranes on the Skyline

There is no doubt that the Ichthys project has started to impact on Darwin’s economy.  This impact is about to step up a gear, with the project worker’s village now open and the resulting increases in numbers of oil and gas workers in Darwin.  More people on high salaries working in Darwin will inevitably result in more activity for many local businesses.

As Kerry Osborne, President of the Urban Development Institute of Australia (Northern Territory) recently said “Unlike every other capital city in Australia, Darwin’s development industry is experiencing strong growth, with over 1000 apartments and over 13,000 square metres of office space currently under construction in the Central Business District (CBD).  This has resulted in thousands of new construction jobs.  As a result, we are seeing a shortage in suitable accommodation and rental prices are increasing above a level which is considered to be affordable.”

To combat high costs many renters are forsaking lifestyle and sharing accommodation.  A drive around Darwin at night, when workers are finished work, shows there are significant car parking issues.  This is because apartments designed for two people (and one or two cars) are presently being shared by four people, but their housing has not been designed to cope with the extra cars.

One thousand additional apartments for Darwin may appear to be a lot, and some commentators have suggested there is an oversupply.  But in reality, for these projects to have achieved presales to meet financing requirements, in excess of 80% of apartments currently being built in the CBD have already been sold.  A large component of the additional demand for housing is due the high number of construction workers who have come to Darwin from the southern states to work on various projects.

During the lead-up to the Federal election, the Urban Development Institute of Australia has lobbied both the Government and Opposition on key issues that are constraining the industry’s ability to deliver affordable housing.  Despite the fact that Darwin is in a different stage of the economic cycle compared with the other capitals, the issues affecting the industry nationally are similar.  The most pressing of these issues are the release of land for housing and addressing red and green tape.  For Darwin the added challenge has been attracting investment to the north.  UDIA’s overall message has been to identify the barriers to good development and remove them, while at the same time protecting the community’s interests.

Over the past twelve months UDIA (NT) has also been working closely with the Northern Territory Government in these areas.  Twelve cranes on the CBD horizon and varying stages of progress on housing sub-divisions such as Bellamack, the Heights Durack, Muirhead, Zuccoli, Johnston stage 2 and Coolalinga are testament to success to date.  The Department of Lands, Planning and the Environment in particular have stepped up and become more proactive.  Their initial response has changed from “no you can’t” to “how can we help”.

The UDIA (NT) is fully supportive of Minister Chandler’s recent comments in Parliament when he raised the issue of height limits in the CBD.  We believe every regulation that has been created must be reviewed.  Is there any tangible reason for a height limit?  Does it matter if a building is 20 storeys, 30 storeys, 31 storeys or 50 storeys?

From a sustainability perspective, building higher density housing reduces living costs as well as transport and infrastructure costs.  However, it is also true that building more storeys adds significantly to construction costs; a developer’s decisions about building heights will depend on the availability and costs of land.

It is unlikely that any developer could justify constructing above 30 storeys in Darwin in the foreseeable future, but if or when that time came, why would we have a rule to prevent it happening?