The number of homes under construction has risen for the first time since 2006, figures have revealed.
Work began on 13,829 properties in 2011-12, up 308 on the previous year.
It is the first time the number of new houses started has risen since 2006-07. But the total is still significantly lower than the 28,434 houses started five years ago.
Housing Minister Margaret Burgess said: "I am encouraged with the increase in the number of houses started over the last year. However, we should be under no illusion that these remain very challenging times for the house building industry."
But the Scottish Government statistics show fewer houses were completed last year, at 15,940, down from the 16,376 completed in 2010-11. The number of council houses finished is up 500 to 1,114. But the number of council houses started has fallen to 798 from 1,443 in 2010-11.
Fewer housing association homes were started and finished last year, with 4,776 completed in 2011-12, down from 5,111 the previous year. Associations started work on 2,175 houses, less than half the 4,656 total for 2010-11.
Fewer homes were also built using cash from the Scottish Government's affordable housing supply programme, helping provide properties for low-cost rent or ownership, with 6,882 completed in 2011-12. This is down 5% on the previous year but is still the third highest amount since the scheme began.
Ms Burgess said: "The rising level of new activity across the whole housing sector provides a welcome boost to our economy, creating and supporting jobs and offering new training opportunities. And the final result is of course the completion of much-needed new homes for people throughout Scotland to live in."
But the Scottish Federation of Housing Associations criticised the drop in the number of housing association homes being built. Policy manager Susan Torrance said: "The clear trend is a significant decrease in starts on site and completions over the last five years, and this marries with our market intelligence from housing associations about the difficulties of building new homes.
"For the sake of the communities in which Scotland's housing associations and co-operatives work, we need to be building social rented homes to meet government targets but we are very concerned that numbers are dropping as cuts to average grant levels bite home."