“The downward trend for new home approvals has now been locked in for about six months,” stated Tim Reardon, Principal Economist for the Housing Industry Association.

Building approvals data for May 2017, released today by the ABS, shows that there has been a decline in the number of new home approvals this year.

“This downward trend confirms our forecasts for a slowing in new residential building projects through 2017,” stated Reardon.

“On the upside, new house starts did increase by 1.0 per cent this month but were still 6.9 per cent lower than the same month last year.

“It is the multi-unit sector of the industry that has slowed more quickly than detached homes. During the three months to May 2017, multi-unit approvals fell by 27.8 per cent when compared with the same period in 2016.

“It is important to note that this dramatic slow-down in multi-units is off the back of the super-cycle of apartments that commenced in 2015.

“The amount of work that is still under construction means that the residential building industry will continue to operate at high levels well into 2018.

“This slow-down is in stark contrast to the growing demands of first home buyers and the need to promote an increase in housing supply.”

Across the states: Tasmania is the only state with a growth in approvals compared to the same quarter in 2016, up 6.9 per cent. New South Wales (down 22.4 per cent); Victoria (down 11.6 per cent); Queensland (down 21.6 per cent); Western Australia (down 18.4 per cent); the Northern Territory (down 51.3 per cent) and the ACT (down 36.2).

“South Australian approvals are just 6.1 per cent below the same levels in 2016 due to the large number of multi-unit apartments getting the green light,” Mr Reardon concluded.

Read more about building starts:

Australia's housing hotspots: HIA report

Slow down in housing hits GDP

Building approvals data confirms softening housing market