Residential building activity saw a slight rise during the first quarter of the year, according to the latest ABS figures.

In seasonally adjusted terms, the amount of residential building work being carried out increased by 1.9% to reach an annual level of $47.6bn during the March quarter.

"It is good to see a modest rise in residential building activity in early 2011, a result driven primarily by a 5.6% increase in new construction of ‘other dwellings’," said Housing Industry Association (HIA) chief economist Harley Dale. "Unfortunately work done on detached houses was flat over the quarter rather than also posting a rise."

Major renovations hit their highest annual value for two years ($6.91bn), following a 1.8% rise over the quarter.

"Major renovations have started 2011 on a brighter note. Australians are increasingly looking to improve their existing homes rather than face the mounting transaction costs and new housing taxes and charges they will incur if they trade-up to another property or build a new home," said Dale.

In terms of the amount of new residential building work being done, the ACT lead the way with a 27.4% seasonally adjusted increase, New South Wales was a distant second with 7.3%, followed by Tasmania (2%) and Victoria (1.7%).

The corresponding figures for Western Australia, Queensland, South Australia and the Northern Territory however were flat or negative.

“Leading indicators of new housing activity point to an acceleration of this downward trend in 2011-12 at a time when we clearly need the opposite to be occurring," said Dale.