Australia saw a "modest rise" in the construction of new homes in the third quarter of 2012, according to new figures.

The ABS Building Activity report shows that new home commencements increased by 2 per Cent, the second consecutively quarterly improvement and the strongest quarter-on-quarter rise in over a year.

"This is no doubt assisted by the 75 basis points cut from the official cash rate over May and June last year," said Geordan Murray, Economist for the Housing Industry Association.

In seasonally adjusted terms the number of detached dwelling commencements increased by 4.3 per cent in the first quarter of the 2012/13 financial year, although remains slightly below (-1.4 per cent) the level of a year ago. There was decline of 1.3 per cent in the number of multi-unit dwellings commenced in the quarter, but the level remains 5.1 per cent higher than the level recorded in the corresponding quarter a year ago.

"New South Wales posted an encouraging result with a 9.5 per cent increase in commencements in the quarter, although it is likely to be influenced by changes to government incentives that occurred around this time. The headline result was underpinned by a substantial 18.8 per cent lift in detached dwelling commencements as well as a 1.8 per cent lift in multi-unit commencements," added Murray.

Taking a look around the other states, dwelling commencements (seasonally adjusted) increased in Victoria by 2.9 per cent and in Western Australia by 23.6 per cent. The number of commencements fell by 14.2 per cent in Queensland, 9.4 per cent in South Australia, 0.4 per cent in Tasmania, 29.9 per cent in the NT and 3.3 per cent in the ACT.

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