Home loans increased more than expected in March, as Australians took advantage of grants and lower interest rates to enter the housing market for the first time.

The number of home loans, seasonally adjusted, increased 4.9% in March from an upwardly revised 1.2% in February data from the Australian Bureau of Statistics, marking the sixth consecutive month of increases.

A survey of economists expected them to gain 4.5%, according to Bloomberg data.

'It's a pretty strong result,'' Matt Robinson of Moody's Economy.com said. 'It really is a reflection of the dramatic monetary policy easing and the Government stimulus efforts.'

The Age