Australia is on track to build a record number of new homes this year, with that strength expected to continue into 2015.
New home sales rose three per cent in October, following a flat result in September, figures released by the Housing Industry Association show.
HIA chief economist Harley Dale said while monthly sales are off the peak reached in April, they are still high.
"That augurs well for healthy new home construction activity persisting into 2015," he said on Thursday.
Dr Dale said other indicators point towards further housing market strength in the new year.
"Australian Bureau of Statistics building approvals are past their peaks but remain at elevated levels," he said.
"Lending for new housing is still trending higher and doesn't appear to have peaked yet."
The figures come after the Australian Bureau of Statistics found that total construction work across the country slipped to its worst level since the post Sydney Olympics slump during the September quarter.
The amount of construction completed fell 2.2 per cent in the three-month period, with residential work down 1.6 per and engineering projects 3.2 per cent lower.