Figures from the Australian Bureau of Statistics show residential building approvals rose by 14.5 per cent in the year to August.
This marks the second consecutive quarter of increases in approvals.
Master Builders chief economist Peter Jones said the trend would contribute to flattening out price growth.
“The jump in building approvals must be seen as a positive in boosting new housing stock to keep a lid on house prices and ensure affordable home ownership,” Mr Jones said.
“As the RBA says, supply factors are critically important – the supply response determines whether additional demand feeds into higher prices or not.”
In August, detached housing inched backwards by 1.4 per cent while multi-unit dwellings increased by 9.2 per cent.
Over the month, the greatest gains were made in Victoria, where approvals climbed by 15.5 per cent.
South Australia was not far behind with an 11.3 per cent rise, while approvals increased 2.9 per cent in New South Wales and 1.4 per cent in Queensland.
The largest decline came in Western Australia, where approvals fell by 16.2 per cent.