ABS Housing Finance figures posted an increase overall in September 2012, however the HIA and Master Builders groups say there is no broad recovery in sight.

In the month of September 2012 the total number of seasonally adjusted loans net of refinancing increased by 1.2 per cent, as did (net) loans for established dwellings.

The number of loans for the purchase of a new dwelling was up by 9.0 per cent in September, but the number of loans for construction fell by 6.3 per cent.

Master Builders Australia said the results have dashed the building industry's hopes of a housing recovery taking hold.

Master Builders Australia CEO Wilhelm Harnisch said the figures reinforce the call for further interest rate cuts from the Reserve Bank.

"The 6.3 per cent fall (seasonally adjusted) in the number of housing loans for the construction of new dwellings will leave residential builders very nervous.

"The September housing finance figures show that the housing sector will be struggling for some time to come. It puts at risk the Reserve Bank's assumption that the housing recovery will offset the decline in the resources sector in 2013.”

"It really was a mixed bag for housing finance outcomes in the month of September 2012," said HIA's Chief Economist, Dr Harley Dale.

"At least some areas of finance for property are looking a little better, but a broad-based recovery is proving elusive."

"In terms of owner occupiers, there is still some growth in the first time buyer market, but the modest improvement in finance to trade-up buyers ran out of steam in the September 2012 quarter.

“The number of loans for the purchase of a new dwelling continues to mount an encouraging recovery, however the number of loans for construction is back to its lowest level since January," said Dale.

"The divergence extends to investor finance as well - the profile for investment lending for existing property is looking slightly better, but for new property it's at a two and half year low," Harley Dale said.

In September 2012 the total number of seasonally adjusted loans for the construction and purchase of new homes increased by 5.1 per cent in New South Wales, 2.8 per cent in Queensland, 1.6 per cent in Western Australia, 28.1 per cent in Tasmania, 2.9 per cent in the Northern Territory, and 2.1 per cent in the Australian Capital Territory. The number of loans fell by 9.1 per cent in Victoria and was down by 11.8 per cent in South Australia.