Housing starts measures the construction of new homes. When more new homes are being built, the construction sector is active, and consumers have the capital to afford taking on such investments. When new homes are finished, they have other effects on the economy as those homes have to be filled with furniture and appliances, boosting other sectors of the economy.
Housing starts in Australia slumped to their lowest level in almost eight years in the December quarter. Potential home owners stayed on the sidelines as they fretted about the economy. That came despite aggressive action by the central bank to bring down interest rates and a fiscal stimulus plan that put more money into people's pockets. The number of housing starts fell 9.9% on the quarter, sharply disappointing the optimistic expectation of a 1% rise. On the year, starts are down 19.5%.
From the Release: "The seasonally adjusted estimate for the total number of dwelling units
commenced fell 3.7% in the June quarter which follows a revised fall of
1.0% in the March quarter."
According to Australian Bureau of Statistics, new private sector house commencements dropped by 0.9% q/q in March, following a revised increase of 0.1% in the December quarter 2006. New private other residential building rose 5.3% in the March quarter 2007 after a revised increase of 1.4% in the December quarter 2006.
