Despite falling prices and slowing auction clearance rates, property developers had a busy June with a surge in both apartment and house building permits.
In seasonally adjusted terms, the number of dwelling approvals grew by 6.4 per cent over the month, to be up 1.6 per cent for the year.
Activity was generally buoyant across the residential sector.
In June, almost 8,900 new apartments were approved, a 7.2 per cent increase on May.
Permits for private sector housing stock rose by 5 per cent, or 10,100 new homes.
The market had forecast a much more modest 1 per cent gain after two months of falling activity.
However, the gains were patchy across the country, with Queensland, Western Australia and Tasmania reporting the strongest activity.
Approvals were softer in Victoria and South Australia.
Non-housing approvals fall
The month also saw a distinct downshift in the renovation market.
The value of alterations and additions to residential building — which accounts for around 40 per cent of new construction — fell 10 per cent.
The value of non-residential construction also fell sharply, down 7 per cent.
The value of approvals in the non-residential sector has now fallen in all but one month this year.
CBA's Gareth Aird said record low interest rates and strong population growth continued to support residential construction.
Mr Aird said despite the housing market cooling in terms of prices and credit, things remained reasonably buoyant.
"On the basis that most of the approvals for houses and apartments turn into commencements, the level of dwelling investment will remain elevated in Australia over the next two years," he said.
Investor retreat continues
However seperate data from the Reserve Bank shows there has been a market decline in loans to property investors.
Housing credit to investors dropped 0.1 per cent in June, the first fall since early 2009, in the midst of the GFC.
However owner-occupiers continue to apply for loans, rising 0.6 per cent for the month, to be 7.8 per cent higher over the year.
Business lending edged up for the month, but is still only growing modestly at 3.2 per cent for the year, while personal credit was fairly flat with credit cards continuing to be used more as a means of payment, rather than a financing tool.
