WA’s residential building market has been ranked the strongest in the country for the first time in more than five years, having been boosted by strong population growth and mining investment, according to a new report.

The Housing Industry Association report, which benchmarks 13 indicators of activity against long-term averages in each State and Territory, says “healthy” levels of activity in the current residential building market have put WA in the top spot since mid-2006.

It shows that first-homebuyer numbers have surged, with the number of loans to that group 48.2 per cent above the decade average.

“This level of activity is likely to have been skewed upwards by changes to the State’s first-homebuyer incentives,” the report says.

HIA chief economist Harley Dale said residential building in WA had been stuck in the “slow lane” for some time, despite the strength of the State’s economy during the same period.

But Mr Dale said a strong recovery was evidently under way.

“While the WA economy was busy performing quite well over the last couple of years, new home building in WA actually hit a 10-year low back in 2010-2011,” he said.

Mr Dale said if there was further growth in the construction of new homes this financial year, he expected it would flow on to the property and rental markets.

“We need to sustain these higher levels of new-home building and then you will see tangible impacts on housing affordability and availability of rentals,” he said.

Urban Development Institute Australia WA chief executive Debra Goostrey said the market had been able to flourish because there had been a steady supply of land made available.

“Unlike the boom in 2005 to 2007 when we ran out of land because it took us by surprise, this time we have been able to keep up the land supply,” Ms Goostrey said.

The Australian Capital Territory was ranked second, while Victoria came third in the association’s report.