House construction hits new high

Housing construction hit a two year high in January, largely due to government stimulus, according to the Australian Industry Group Performance of Construction Index. The index rose 8.4 points to 57.7 in January, well above the 50 level separating expansion from contraction. The house building sub-index grew very strongly to 10.3 points to 63.7.

AI Group director public policy, Peter Burn, said "In particular, house building activity has continued to expand with the flow through of first home buyer financed projects and the lagged impact of last year's historically low mortgage rates. There was also a positive tone in other areas of the industry with work on apartments, engineering and commercial building projects all moving back into growth territory."

The Federal Government reduced the first home owners boosted grant for new homes from $21,000 to $14,000 on October 1, 2009, and lowered it back to $7,000 on January 1 2010.

Source: Herald Sun