Australian Bureau of Statistics (ABS) figures released yesterday show building approvals at their lowest since July 2012.
Approvals fell again in December, adding to growing concerns about Australia's economic outlook.
According to the ABS, total approvals slumped by 8.4% to 13,995 after seasonal adjustments, leaving the decline from 12 months earlier at an ugly 22.5%.
Not since June 2013 have total approvals been this low.
The largest falls during the month were seen in New South Wales, Victoria and Queensland where home prices are falling sharply.
At the end of 2018, total approvals stood at 212,316, down from 224,871 in 2017 and the record of 232,232 set in 2016.
Master Builders Australia’s chief economist Shane Garrett said the volume of new apartment buildings are smaller than at any time since July 2012.
While home building approvals fell 8.4%, detached house approvals were down by 2.1% but approvals for new apartments/units dropped by a whopping 18.6% during December.
“Today’s ABS figures complete the full 12-month picture for 2018," he said.
"For the year overall, the volume of new home building approvals was pretty strong with over 212,000 permits issued for new dwellings.This was down only modestly (-5.6%) compared with the 2017 total.
“More worrying is the pace at which approvals have been falling back over more recent months. During the final three months of 2018, total approvals were 23.7% lower than a year earlier – with apartment approvals suffering a 40.1% reduction over this period,” he said.
“Faltering new home building activity has been occurring against the backdrop of falling house prices, the Royal Commission’s work and uncertainty about what housing policy will look like after May’s Federal Election,” Garrett said.
“Clearing up some of these uncertainties would help get the housing market back on its feet."
During December, new dwelling approvals increased in three markets including South Australia (+5.6%), the Northern Territory (+1.7%) and Western Australia (+1.1%).
The largest reduction in approvals hit Tasmania (-24.3%) followed by the ACT (-21.3%). The volume of approvals also declined in New South Wales (-8.6%), Victoria (-8.1%) and Queensland (-5.8%).