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Fed: First home buyers show stimulus works - Rudd

12 May 2009 3:29 PM

CANBERRA, May 12 AAP - First-time home buyers now account for a record share of new housing loans, proving that stimulus package measures are working, Prime Minister Kevin Rudd says.

First home buyers made up a record 27.3 per cent of all home loans granted in March according to data released on Tuesday, topping the previous peak of 26.5 per cent set in January and February.

This was the highest proportion since the Australian Bureau of Statistics data series began in mid-1991.

"These are elements which go to underpin one core proposition: a government committed to reducing the impact of the global recession on Australia puts in place a concerted series of measures," Mr Rudd told parliament.

"It will have an effect."

The government's first $10.4 billion stimulus package, unveiled in October, doubled the first home buyer grant for established homes to $14,000, and tripled it to $21,000 for newly constructed dwellings.

There is speculation the grant for brand new housing will be maintained in this year's budget, while the subsidy increase for established homes is scrapped.

The number of home loans for owner-occupied housing jumped to a 13-month high of 59,793 in March.

A 4.9 per cent rise in March was even sunnier than economists' forecasts of a 4.5 per cent increase.

Since September, when the Reserve Bank began cutting interest rates, the number of home mortgages has grown by 23.8 per cent.

Amid the economic woes, recent figures for unemployment and retail sales data have produced good news, which Mr Rudd used to taunt the opposition.

"The opposition, the Liberals, any time there is positive news in the economy they hate it," Mr Rudd said.

"Because they find it does not suit their political agenda."