The federal government's HomeBuilder scheme continues to boost Australia's building activity, with the detached-dwelling approvals hitting a 20-year high, according to the latest data from the Australian Bureau of Statistics (ABS).

Over the three months to October, detached-housing approvals increased by 18.6%, with all states and territories reporting gains except for the Australian Capital Territory. On an annual basis, approvals for detached homes during the three-month period were 23.2% higher.

Angela Lillicrap, economist at the Housing Industry Association, said the detached segment would likely continue to report gains in approvals over the coming months, especially due to the extension of the HomeBuilder scheme.

"HomeBuilder was the catalyst for improving consumer confidence in the housing market. The strength of building approvals is due to several factors including low interest rates and changes in consumer preferences," she said.

Western Australia reported the biggest improvement during the period, with detached housing approvals in the state rising by 62.8% from last year. Queensland and the Northern Territory also registered a surge in detached dwelling approvals.

However, the multi-unit segment remained muted, with approvals still down by 12.5% from last year even with the small gain posted in the month. Lillicrap said there is a divergence between the conditions facing detached house builders and apartment builders.

“Slower population growth, particularly in Sydney and Melbourne, and an increased preference for detached houses, will likely see demand for apartments constrained going into 2021,” she said.

Overall, the total number of dwellings approved increased by 3.8% on a monthly basis. This growth was driven by large increases in New South Wales (32.1%) and Western Australia (29.7%).

"The continued strong demand for detached housing follows the relaxation of COVID-19 restrictions in most states and territories. Record low interest rates and a range of federal and state-based incentives are also providing support for the housing sector," said Daniel Rossi, director of construction statistics at the ABS.