The Northern Territory will have a builders’ insurance scheme granting wider protection for consumers next year, before an expected upturn in residential construction.

Six years after modifying the territory’s Building Act to offer limited home warranty insurance, the previous ALP government passed legislation for a full builders’ insurance scheme, but its final makeup was yet to be approved.

Now the Country Liberal Party (CLP) government says the scheme will be in place by January, meaning the NT joins other authorities in legislating for home warranty insurance. The exception is Queensland, where the Government underwrites home warranty risk and the Building Services Authority regulates the industry.

The NT package will include a fidelity fund to provide residential building cover in the event of death, disappearance or bankruptcy of a builder. Regulated progress payments will also be established, alongside a commissioner of residential building to oversee disputes and maintenance.

“Territorians undertaking the considerable investment associated with building a home deserve to be protected from unforeseen circumstances,” Business Minister Peter Chandler said.

The NT Government has been the unofficial underwriter of home warranty insurance in recent years, with the private sector showing little interest in the market.

The Property Council of Australia says the near-term outlook for residential construction in the NT is the highest in the country.

Housing prices in the NT are the highest in Australia amid an economic boom and almost full rental occupancy rates. The CLP has promised to promote the construction of 2000 homes in the next four years.