There were 16,425 dwelling units approved in May, which represented a 14.3 per cent increase on the year before.
It also marked a 9.9 per cent jump on April, following three consecutive months of declining approval numbers.
Approvals were given for 9,278 houses – up 14.5 per cent annually and 0.5 per cent monthly.
There were also 6,950 approvals for dwellings excluding houses, which was 19.9 per cent higher than the year before and 27.2 per cent higher than the previous month.
The value of total building approvals rose 26.1 per cent in May after falling for four months.
The value of residential building rose 13.5 per cent after falling for three months, while the value of non-residential building rose 59.5 per cent after falling for four months.
Master Builders Australia chief executive Wilhelm Harnisch said the rise in building approvals shows the building industry is well-placed to replace mining as a “major engine of growth and jobs” for the economy.
“This reflects confidence in the industry and will provide a pipeline of work for up to the next three years,” he said.
“Of some concern, however, is the continuing weakness in approvals for detached housing, which validates the Reserve Bank’s decision to leave interest rates at record lows,” he said.