Sales of new homes hold up despite cut in first-home buyers’ grant

Despite the government's first homebuyers' grant diminishing, spending on new homes has decreased very little, according to new Housing Industry Association figures.

7,117 new homes were sold in January this year, a rise of 8 per cent on December 2001 and a 14 per cent increase on January last year. Although there were falls in some States, strong rebounds in Victoria and Western Australia offset these.

The HIA's Ruth Morschel says that activity will hold up strongly for some time. Allam Homes' Paul Nash agrees; he says the company hasn't seen any slackening of demand and doesn't see any shortage of consumer confidence in the near future.

The HIA is realistic about longer-term prospects, but says that the large amount of work in the pipeline and extended completion time for first-home buyer houses are two strong factors keeping activity ticking along for the present.