Building approvals dipped in February, pulling back from record high figures in the previous month, official data shows.
The Australian Bureau of Statistics data showed the number of buildings approved dropped a seasonally adjusted 3.2 per cent to 18,768 in February.
But the result beats forecasts by economists surveyed by Bloomberg, who predicted a 4 per cent fall in approvals during the month.
The figures have pared back after jumping to a fresh record in January, but the rate of new building approvals is still tracking higher in trend terms. Total dwellings approved lifted 1.6 per cent in trend terms in the month.
Over the 12 months to February, building approvals were up 14.3 per cent on a seasonally adjusted basis, the Australian Bureau of Statistics said, far ahead of expectations of a 10.7 per cent increase.
February's fall in approvals was due to a drop in 'other dwellings', which includes apartment blocks and townhouses, which declined 6 per cent.
The figure for apartments is very volatile, representing the bulk approval rate for apartment towers. Over the twelve months to February apartment approvals have surged 36.2 per cent.
Approvals for private sector houses decreased by only 0.1 per cent in the month and over the twelve months to February have fallen by 1 per cent.
February's fall was to be expected after four consecutive months of growth, National Australia Bank senior economist David de Garis said.
"You are going to get these sorts of big changes, particularly in the multi-unit sector, you only need a couple of big projects to be approved in one month and less or more next month and these numbers can swing around a lot," he said.
"The underlying picture is for continued trend growth in the apartment sector, as opposed to the traditional detached housing market where approvals have been flat for some period time."
Approvals for private sector houses fell 0.1 per cent in February, and 'other dwellings', which includes apartment blocks and townhouses, was down 6.0 per cent.
Mr de Garis said the RBA would have to weigh up the impact of a strong housing sector on the economy against falling iron ore prices when considering interest rates at next week's board meeting.
JP Morgan economist Ben Jarman said the figures indicate the housing sector growth is clearly being driven by interest rates cuts.
"There's at least one channel where the RBA is getting some sort of result," he said.
"What's missing is the spill-over from housing to consumption behaviour."
The opportunities for investors to buy off the plan have driven the strong growth in high density dwelling approvals in recent months, and will continue to do so, Mr Jarman said.
"Property developers can effectively sell new properties off the plan to foreign buyers whereas they can't really do that with existing housing," he said.
"That's probably helping to support the longer run demand for new dwellings."
Yesterday, the Housing Industry Association said sales of new houses increased by 1.1 per cent in February, hitting a new cyclical high driven by apartment sales, while detached home sales continued to decline.