The government's Australian property investment, particularly under the schools programme and social housing initiative has continued to keep the economy insulated from the downturn, according to the Master Builders Australia.
Its latest building and construction survey indicates that although activity fell in the three months to the end of December, stimulus measures continue to provide a cushion.
Chief economist at Master Builders Australia Peter Jones said that the spending has helped to prevent a "nose-dive early in 2009".
He added: "Spending on the schools programme and social housing initiative are helping to offset industry weakness, particularly in non-residential building and construction.
"Residential builders remain positive about the outlook, with key forward indicators providing some encouragement."
Earlier this month, Mr Jones suggested that demand for housing finance is beginning to show its effects across the Australian property sector, particularly among first-time buyers.