WA building approvals dipped in November but the national rise, coupled with other more positive global signs, should give the central bank the confidence to leave interest rates on hold in February, economists say.
Nationally residential building approvals rose 2.9 per cent in November, the Australian Bureau of Statistics said on Thursday.
The result was broadly in line with market expectations of a three per cent improvement.
While the number of permits to build detached houses fell 0.3 per cent in the month, permits for multi-unit residential properties, which is a more volatile category, rose 10.1 per cent.
Building approvals were up 13.2 per cent in the 12 months to November, the ABS data showed.
In WA, building approvals dipped 1 per cent over the month to 1906 in November.
St George Bank chief economist Hans Kunnen said although the national detached housing sector continued to be flat, the unit sector appeared to be doing well.
"It is not a disastrous number. You would always like it to be better, but it is modest growth," Mr Kunnen said.
"It is all not doom and gloom."
Mr Kunnen said he expected the RBA to leave the cash rate unchanged at three per cent when it met in February.
"The global backdrop has improved considerably. That's a key thing," Mr Kunnen said.
"They of course want to keep some powder dry in case things do go awry in Europe or even America."
The central bank traditionally does not meet in January.
The Reserve Bank of Australia (RBA) board cut the cash rate by 25 basis points to three per cent at its December board meeting.
The Australian dollar was little changed in response to the data.
At 1139 AEDT, the Australian dollar was at 104.96 US cents, compared with 105 US cents shortly before the building approvals report was published at 1130 AEDT.
But National Australia Bank chief economist Rob Henderson said the housing figures weren't as positive as they first appeared, with a fall in the value of buildings approved.
Mr Henderson said the value of residential buildings approved in the month rose 2.7 per cent, after falling 11.4 per cent in October, while the value of non-residential building approved fell 14.4 per cent.
He said the fall in the number of approvals for detached houses, a less volatile measure than unit approvals, was also a concern.
"It's hard to paint a positive picture out of these figures," he said.
Mr Henderson said the figures showed the 175 basis points in interest rate cuts the RBA has delivered since November 2011 had done little to boost housing construction and more rate cuts may be needed this year.
"In short these numbers are very weak in my view and there is no real sign of any traction from the RBA's rate cuts showing up in this leading indicator of construction activity," he said.
"You'd want to see an apparent turnaround for construction before too long, otherwise it suggests more interest rate cuts are needed to stimulate the economy."