Westpac economists said in a research note that the rise housing finance in October signalled the start of a recovery for the housing market.
This momentum will hopefully support the recovery in the housing market.
The RBA's decision to slash interest rates by 400 basis points since September, and the federal government's stimulus package for first home buyers, would get new home buyers into the housing market.
The only downer is the fear of unemployment that is creeping into the scenario.
JP Morgan forecasts the RBA will lower the cash rate by 50 basis points at their next meeting in February, and by another 25 basis points in March to a 3.5 per cent rate, lowest rate since 1965.
Others are now saying that another 100 basis point reduction in February is on the cards.
