Building approvals are up for the first time since September, a sign the housing sector is set for a sustained recovery.

Approvals for the construction of new homes rose 6.8 per cent across Australia in January, seasonally adjusted, the Australian Bureau of Statistics said on Tuesday.

Economists had forecast a rise of 0.5 per cent in approvals for January.

St George Bank economist Janu Chan says the figures show lower interest rates have boosted the residential housing sector.

“It’s an encouraging sign that residential construction is going to provide that strong contribution to growth this year,” she said.

“It will assist in filling the (mining investment) gap and the RBA has been looking for non-mining parts of the economy to start picking up and this is further evidence this will be occurring.”

Approvals for private sector houses rose 8.3 per cent in the month, and the ‘other dwellings’ category, which includes apartment blocks and townhouses, was up 4.6 per cent.