It is difficult to describe the predicament facing the people of Kinglake.

On the one hand they are deep in grief over the loss of friends and relatives, neighbours and acquaintances from their town.

They have got a massive clean-up in front of them, funerals to attend and children to care for. And then there are other old echoes of their previous lives.

Different banks seem to have different ideas about how the bushfire survivors should go about resuming mortgage repayments on houses that no longer exist.

Matt Falla says he is lucky his house survived, but just when he is getting back on his feet, he has had to worry about his mortgage.

After diving most of 2008, the number of loans committed for housing is now on the way up, according to the latest data from the Australian Bureau of Statistics.

The total value of owner-occupied housing commitments jumped by 7.1% in December 2008 compared to a 1.6% rise in November 2008. The largest increase in home loan volumes has been for the purchase of new dwellings, where on a seasonally adjusted basis the number of housing loans for newly constructed dwellings soared 15.2% over the month.

Mortgage Choice managing director Paul Lahiff said: "With the third consecutive month of data showing improved housing finance demand across major categories, we are confident the industry has passed a crossroads and is heading in the right direction, at least until the First Home Owner Boost has run its course".

Home-loan approvals gained in December as consumers warmed to lower interest rates and Government packages aimed at helping people buy houses.

The number of home loans, seasonally adjusted, gained 6.4% in December from the previous month, according to the Australian Bureau of Statistics. Analysts surveyed by Bloomberg were expecting a 3.5% increase in the month, reflecting the easing credit conditions.

The December rise marks the third consecutive month of gains in home-loan approvals, as interest rate cuts and a $10.4 billion Government stimulus package - aimed in part at home buyers - begins to get traction.

TWELVE months ago, everyone was told to cut spending to help save Australia's economy. Now the Federal Government can't get us to spend enough.

What a difference a year makes.

The Rudd Government is spending big and plunging the country into debt to give us money. It's then encouraging us to spend.

At the same time, mortgage repayments are falling, with last week's drop in interest rates giving households even more money to spend.

But not everyone is smiling.