Australian dwelling commencements in the September quarter fell 6.8 per cent from the June quarter to 35,672 units, seasonally adjusted, official figures show.
The September quarter result was down from an upwardly revised 38,290 units in the June quarter.
In the year to September 2011, total dwelling commencements dropped 11.5 per cent, seasonally adjusted, the Australian Bureau of Statistics (ABS) said today.
WA was below the national average with a decline of 5 per cent.
Housing Industry Association senior economist Andrew Harvey said private sector detached housing starts had fallen for five consecutive quarters reflecting the combination of dawdling rate of policy reform in reducing the high cost of new housing and a deterioration in household confidence.
“Put this result on top of the September quarter national accounts outcome which showed there isn’t much to the Australian economy beyond the mining sector and the urgent need for stimulus to kick-start new home building becomes crystal clear,” Mr Harvey said.
“The Federal Government needs to act urgently to provide a short-term boost to new housing while re-engaging the reform agenda to reduce the structural impediments to supply.”
CommSec economist Savanth Sebastian said the data painted a picture of a housing sector that was "going nowhere".
"Activity levels have dried up, with potential home buyers remaining on the sidelines," Mr Sebastian said.
Recent interest rate cuts by the Reserve Bank of Australia should provide a catalyst for a modest improvement in building activity, he said.
"Given the significant impact that housing has on an array of other sectors, a resurgence in housing activity will be needed to support broader economic growth over the coming year," Mr Sebastian said.