The Australian Bureau of Statistics (ABS) reported the number of home loans approvals rose by 6.4 per cent in December, while their value was up by 7.1 per cent in seasonally adjusted terms.
Lending is still down sharply from a year ago.
The number of home loan approvals recorded an annual fall of 18.1 per cent while their value was down by 11.4 per cent over the year.
Despite that, the ABS estimates the current trend to be positive, rising by between 1 and 2 per cent per month in both number and value terms.
The proportion of home loans accounted for by first-home buyers rose to 25.4 per cent, its highest since 2001, from 23.6 per cent in November, confirming the increased first-home buyers grant has had some effect.
However, that cannot explain all of the increase in December, so the cuts in interest rates in the final four months of 2008 have most likely had some impact along with, most likely, some easing in home prices.
The figures show the value of loans approved for investors bounced back by 2.9 per cent in December after a 6.8 per cent drop in November, to be 24.8 per cent down from the previous December.
The trend in the investor category is downward but that has been more than offset by rising demand from home-buyers, so the total trend is now rising gradually, by 0.8 per cent per month according to the ABS.
Another big positive is that lending for new housing, home-buyers and investors included, jumped by 10.3 per cent in value terms in December to its highest level since July.
No-one is expecting a new housing boom.
Confidence, as shown by the Westpac-Melbourne Institute index of consumer sentiment released earlier today, is still fragile.
The index fell 85.8 in February, it lowest level since a slightly lower reading of 85.5 in November.
A year earlier the index was at 97.4 and a year before that it was at 111.4 so this has been a profound deterioration in the mood in Australian households.
More interest rate cutting will probably be needed to prevent the economy from going backwards.
