The Australian Bureau of Statistics (ABS) has reported on Wednesday that building approvals in Australia has increased by 15.3 percent to 16,383 units in March from the 14,208 units in February, which economists attributed to rushes of acquisition in flats and townhouses.

In a report by AAP, ABS said that the figures were the highest posted since October 2003 and marked the initial rise in overall approvals since December 2009, as building approvals went up by 51.6 percent in the year leading to March.

Also, ABS said that building approvals have been predicted to raise by 0.8 percent in March and 25.6 percent in 2010, as approvals for other private sector dwellings shot up to 4,558 units in March while private sector houses jumped to 9,799 units.

JP Morgan economist Helen Kevans told AAP that the posted jumps were exciting developments and could be considered as paybacks for the weakness seen in the previous months, as she noted that majority of the upward movements were from the other dwelling category.

Ms Kevans said that the other dwelling category was known for its volatile nature and since it posted 60 percent hike in approvals, she speculated that "it is likely to be few multi-developments that were approved in the month and could be attributed to a backlog of approvals but it is a bit unclear."

She cautioned though that it has been a downward trend in the past few months and the numbers reported may not be giving them the correct perception.

However, Sara Hoenig of Commonwealth Bank told AAP the surging numbers should ease the Reserve Bank of Australia's (RBA) grave concern on the apparent housing shortage that has been plaguing the nation, stressing that "increased activity in building approvals would be pleasing to the RBA."

The central bank's pronouncements have been lately focused on Australia's housing supply shortage and the local property market, which the International Monetary Fund (IMF) had branded as significantly over valued.

And news of surging numbers from a traditionally volatile sector is a good sign, according to Ms Hoenig as she added that "the RBA have been saying in recent months that there's been an increase in funding flying through to that sector, and that's feeding the very strong result."