The Australian home building sector is still going quite strong despite an across-the-board fall in building approvals figures for February, economists say.
Approvals for the construction of new homes fell 5.0 per cent in the month, after a 6.9 per cent gain in January.
JP Morgan economist Tom Kennedy says that although construction of new homes fell five per cent, the breakdown of the figures show the residential construction sector is strengthening.
"If you look at the data over the past few months, there is a clear uptrend in single family dwellings,'' he said.
"Multi-unit buildings are typically bought by investors, whereas single dwellings are bought by families, so it's a more accurate indication of what is going on at the household level.
"The data does suggest there are signs of life out there in the residential construction sector.''
Approvals for private sector houses fell 2.1 per cent in February, and the 'other dwellings' category, which includes apartment blocks and townhouses, was down 8.7 per cent.
Over the 12 months to February, building approvals were up 23.2 per cent, the Australian Bureau of Statistics said on Wednesday.
CommSec chief economist Craig James said the housing sector was still much stronger than a year ago.
"We are seeing building approvals, in trend terms, at record highs. We've got activity up 30 per cent compared to a year ago,'' he said.
"This is very good news for the economy. It shows that housing is taking over the driving seat from the mining sector, and it's good news for builders and developers.''
However, Mr James said, the figures will continue to be volatile from month to month.
"If you have a significant rise one month, it's going to have a correction the next month,'' he said.
Mr James said the recent run of good economic data shows that the chances of another interest rate cut from the Reserve Bank of Australia are "pretty much dead and buried''.
- AAP
