Builders started work on more than 34,000 new residential homes in the three months to September, a 9.4 per cent increase on the previous quarter, new data shows.

This was the first growth in home building in a year, aided by low interest rates and a generous first home owners’ grant for new properties.

However, such support is being wound back.

Economists’ forecasts had centred on a six per cent rise in dwelling commencements in the September quarter.

The increase included an 8.1 per cent seasonally adjusted rise in new private houses to 24,570 properties, while other dwellings - such as townhouses and apartments - increased by 9.0 per cent to 7,699 units and the first growth since the March quarter 2008.

Up until the end of September, the federal government was offering a $21,000 grant for people buying a new residential property as part of its first stimulus package introduced in October 2008.

The grant was reduced to $14,000 in October this year, and it will return to the original $7,000 from January.

The Reserve Bank of Australia (RBA) has also raised the cash rate in three 25 basis point increments, winding back its own monetary policy stimulus from “emergency” levels.

Minutes from the RBA’s December board meeting, also released on Tuesday, said that members saw the arguments for raising the rate or leaving it unchanged as finely balanced.

“But (they) concluded that the stance of monetary policy would best reflect the circumstances facing the economy over the period ahead if there were an increase in the cash rate,” the report said.

“Members saw this adjustment, together with those in the preceding two meetings, as materially shifting the stance of policy to a less accommodative setting and, therefore, as increasing the flexibility available to the board at future meetings.”

The minutes also said economic data released in November pointed to a rise in the nation’s September quarter gross domestic product (GDP) that is released on Wednesday.

AAP