Home financing rose unexpectedly in January, complicating forecasts calling for a down cycle in domestic real estate.

The number of home loan approvals rose a seasonally adjusted 0.5% in January from December, following a gain of 0.4% the previous month, the Australian Bureau of Statistics (ABS) said in a report issued last Friday.

Economists surveyed ahead of the announcement had expected a fall of 1% over the month.

Investment lending for homes, which is used to gauge fixed residential property, rose 4.2% from December, following a gain of 1% in November, according to the ABS. Investment lending has returned to levels last seen in early 2015 when APRA announced curbs designed to slow credit to people buying homes as an investment rather than as a place to live.

Meanwhile, finance approvals to build new homes declined by 1.4% in January from December. Approvals to buy newly built dwellings fell 0.3%, while lending for the purchase of established homes rose by 0.8% in the month.

Even though the market for new homes has peaked in December, the outlook remains steady, according to data from the Housing Industry Association (HIA). The organisation reported last week that new home sales fell 2.2% in January, with sales of detached and unit homes declining.

In common with many other advanced economies, Australia has seen its home prices rise sharply in recent years as a result of supply constraints and surging foreign investment. The heads of three of the country’s largest banks assured a parliamentary committee last week that Australia’s housing market was not in a bubble.