Housing construction approvals have dipped in the past couple of months, but are still at 19-year highs.
Home building approvals were down 3.5 per cent in March, following a 5.4 per cent fall in February, according to official figures released on Monday.
However, there were over 188,000 home building approvals in the 12 months to March, the highest since 1995 and 20 per cent higher than the year before.
Commonwealth Bank senior economist Michael Workman said the housing construction sector looks ready to be the main driver the Australian economy when mining investment winds down.
"There is still a significant boost coming to construction and spending which will help offset the winding down of resources investment from its recent peak," he said.
"Non-residential construction approvals are also trending higher, thanks to strong interest in new CBD commercial developments."
Mr Workman said the strength in housing will help employment growth and flow into other sectors of the economy.
"We expect to see sharp rises in the construction activity data in coming quarters," he said.
"It should also flow into higher spending at big box retailers as the new dwellings are kitted out."
JP Morgan economist Tom Kennedy said the weakness in the home building approvals is almost entirely attributable to a larger than expected decline in the volatile high density approvals," he said.
"Detached dwelling approvals were more encouraging, with the number of approvals stabilising at elevated levels and consolidating the gains made earlier in the quarter," he said.
"High density approvals have been a consistent drag on the headline data in recent months."
Approvals for private sector houses fell 0.7 per cent in the month, and the 'other dwellings' category, which includes apartment blocks and townhouses, was down seven per cent, the seasonally adjusted figures from the Australian Bureau of Statistics showed.
Housing Industry Association chief economist Harley Dale said home building will be a major boost for the economy in 2014.
"If you're searching for highlights to the Australian economy, new housing is the best shot you can take, he said.
"The momentum in approvals has slowly shifted from multi-units to detached houses and that is evident in the March quarter results," he said.
"That having been said, multi-unit approvals hit a record high in the December quarter last year.
"How many of these approvals are converted into dwelling commencements and over what timeframe will exert a considerable influence over wider domestic economic activity."
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