The number of approvals in the South West has almost doubled according to WA Country Builders regional sales and marketing manager Peter Cherry.

He said a high proportion of the activity came from first homebuyers who took up the Federal Government’s first homebuyers grant of $21,000 to build a new home.

"The first homebuyers had a large uptake in the South West," Mr Cherry said.

He said there would be a flow on effect from the approvals into the local economy as a whole.

"The first thing it will do is inject more confidence in the building sector," Mr Cherry said.

This could create a builder shortage, Mr Cherry said, but he expected the activity to carry on for some time.

"What we expect and hope is it coincides with growth of the sector," Mr Cherry said.

The growth comes off the back of statistics showing a downturn in the value of residential building approvals in the City of Bunbury and a rise in Dardanup, Capel and Harvey shires.

According to the figures released by the South West Development Commission, Bunbury had about $48 million worth of residential building approvals last financial year, compared to $59 million in 2007/08.

Mr Cherry said this was because no major residential estates in the City of Bunbury.

Approvals in the Shire of Harvey, where the Treendale estate in Australind is being established, saw a value increase of $5 million worth of approvals last financial year to a total of about $68.3 million.

Building also continues in Dalyellup estate in the Shire of Capel, where value of approvals increased from about $67.4 million to more than $75 million.

And in the Shire of Dardanup is Millbridge estate, where Mr Cherry said building continued.

The shire recorded almost $39 million worth of approvals in 2008/09, compared to $27 million the year before.