National house prices rose 0.7 per cent in June after a 2.1 per cent climb in May, according to Residex data.

This figure is just 0.5 per cent down from the peak in May 2008 and with no stabilisation in sight, said Residex senior economist Matthew Hassan.

Units have outperformed houses with an overall increase in the year to June of 3.4 per cent, and with Sydney and Melbourne ahead in the stakes showing increases of 11.4 per cent and 11.5 per cent respectively.

Hassan said this return to price growth would only add momentum to the upturn, which now appeared to be attracting more interest from upgraders and investors

Loans for new housing construction rise by 8%!

Home lending in Australia continued to strengthen buoyed by demand from first homebuyers and investors according to a new data.

The latest housing finance figure from the Australian Bureau of Statistics showed the number of new housing loans climbed by 2.2% in May to its highest level in more than a year. Loans for new dwelling construction recorded an 8% jump, while lending to buy new dwellings rose by 2.9%.

"The latest round of housing finance figures has reinforced the strength of the housing sector," said Savanth Sebastian, economist with CommSec. "The sustained improvement in overall housing activity and more importantly, the substantial jump in construction of new dwellings, will have multiplier effects throughout the economy. The sharp lift in home construction should ensure economic growth remains well supported."