The number of homes approved to be built has surged in January to a new record high, amid a strong increase in volatile apartment approvals, official data shows.
The Australian Bureau of Statistics data showed the number of buildings approved lifted a seasonally adjusted 7.9 per cent to 19,282 in January.
The result beats forecasts by economists surveyed by Bloomberg, who predicted a 2 per cent fall in approvals during the month.
The figures jumped to a fresh record after paring back in December from the previous all-time high in November.
Over the 12 months to January, building approvals were up 9.1 per cent, the Australian Bureau of Statistics said, far ahead of expectations of a 1.7 per cent decline.
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January's surge in approvals was boosted by a strong lift in 'other dwellings', which includes apartment blocks and townhouses, which increased 19.6 per cent in January. For the twelve months to January, approvals have lifted 23.6 per cent.
Approvals for private sector houses, however, increased by only 0.4 per cent in the month. Over the twelve months to January, house approvals have fallen by 2.9 per cent.
The increasing supply of homes in large cities will eventually slow price rises, National Australia Bank senior economist David de Garis said.
"It will help in time, but with apartment approvals the lags are longer," he said.
"The pipeline of building seems to be growing through January, that's good for dwelling investment for the first half of this year and beyond."
While new housing is on the rise, weakness in other parts of the economy should leave the door open for more interest rate cuts by the Reserve Bank in 2015, Mr de Garis said.
"It's problematic for the RBA because they've certainly got growth in dwelling investment but they need a lot of growth elsewhere, so we still think there is room for the RBA to cut in the months ahead," he said.
JP Morgan economist Tom Kennedy said the building approval figures were much better than expected, but construction of detached houses remained soft.
Ongoing property price rises show demand is still outpacing supply, despite the strong levels of new approvals, he said.
"Structurally, Australia hasn't built enough houses over the past decade, so this is helping to correct that," Mr Kennedy said.
"If we were building too many houses, there'd be no price pressure.
"They're obviously being built to meet demand and, at the moment, the price is telling you that the demand is continuing to outpace supply."