Approvals for the construction of new homes rose 17.1 per cent in January on the back of a strong recovery in high-rise construction, easily beating the five per cent increase the market was expecting.

Approvals for private sector houses fell for the fourth time in the last nine months in January, down 1.1 per cent to 9,825.

But this was more than offset as approvals in the volatile ‘other dwellings’ category, which includes apartment blocks and townhouses, continued to swing sharply.

Permits in other dwellings jumped 42.2 per cent in January, after retreating by almost 40 per cent in December and surging 32 per cent the month prior.

Over the 12 months to January, building approvals were up 12.0 per cent, the Australian Bureau of Statistics said on Monday.

In NSW and Victoria, approvals recovered from strong December declines to a respective 29.7 per cent and 21.0 per cent rise.

The Australian dollar lifted to 77.69 US cents shortly after the figures were published, up from 77.60 US cents just prior their release.

By Christian Edwards