Dwelling approvals for detached houses rose for the sixth consecutive month in December, reaching the highest level recorded since 1983, according to the Housing Industry Association (HIA).

The number of detached house approvals increased by 43.7% during the December quarter. Over the year, approvals were 13.9% higher.

Angela Lillicrap, economist at HIA, said the surge in the number of building approvals has continued each month since the announcement of HomeBuilder in June.

"This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy," she said.

Despite this growth, the building approvals data still lags behind other leading indicators including new-home sales and housing finance data.

"With this in mind, it is likely that we have not yet seen the peak of detached-home building approvals," Lillicrap said.

Multi-unit approvals also increased by 14.4% over the quarter. However, this relatively strong level of approvals for multi-units is not an indication of the volume of commencements to occur in 2021, as these likely began the process prior to COVID-19. 

"Not only does the apartment market face headwinds from a lack of population growth and a preference for detached houses, yesterday’s regional migration data shows a shift away from metropolitan Sydney and Melbourne," Lillicrap said. “The apartment market is also likely to be constrained until overseas migration returns."