New home approvals in Australia recovered in February after a decline in the first month of 2016, according to the latest data to be released.

Home building approvals increased by 3.1% during February to 232,194 for the previous 12 months, after beginning the year on a much slower note, says the new report from the Housing Industry Association (HIA).

According to HIA senior economist Shane Garrett the flow of data over recent months indicates that approvals may have hit their high point in the year in October 2015, with a record 239,250 approvals registered over that 12 month period.

‘The monthly lift in approvals activity during February is welcome but it seems increasingly likely that approvals peaked late last year and that the volume of new home building activity is set to ease as 2016 progresses,’ he said.

‘Our latest forecasts indicate that the about 200,000 new dwelling starts will take place during 2016, a reduction of 9.2% from last year. This would still represent a very high level of output by historic standards,’ he explained.

A breakdown of the figures shows that total seasonally adjusted new home building approvals saw the largest increase in Tasmania with growth of 24.5%, up 14.3% in New South Wales and up 9.5% in Queensland.