Building approvals soared more than expected in January, according to the Australian Bureau of Statistics.
ABS data showed the number of buildings approved rose a seasonally adjusted 6.8 per cent to 17,514 in the month.
That compares to an initially reported 16,141 approvals in December, seasonally adjusted.
Bloomberg economists had expected the figures to show a 0.5 per cent rise in approvals during the month.
Building approvals are now 34.6 per cent higher, seasonally adjusted, than in the same month last year, higher than an expected 24 per cent lift.
Approvals for private sector houses rose 8.3 per cent in the month, and the "other dwellings" category, which includes apartment blocks and townhouses, was up 4.6 per cent.
St George Bank economist Janu Chan says the figures show lower interest rates have boosted the residential housing sector.
"It's an encouraging sign that residential construction is going to provide that strong contribution to growth this year," she said.
"It will assist in filling the (mining investment) gap and the RBA has been looking for non-mining parts of the economy to start picking up and this is further evidence this will be occurring."
RBC Capital Markets senior economist Su-Ling Ong said it looked like the housing sector was starting to gain some strength.
"It was a pretty decent jump in approvals in the month of January," she said.
"That underlying trend continues to strengthen and the composition was very good as well. It was driven by a rise in approvals for private sector houses.
"It's very much consistent with this upswing in residential housing construction gaining a bit of momentum."