Australia's housing sector has been hit again, with home sales dropping for a third consecutive month.
The Housing Industry Association's new home sales report for September shows a drop of 3.7 per cent in the month.
That follows a fall of 5.3 per cent in August, which brought new home sales to their lowest point since 1997.
HIA chief economist Harley Dale said the data showed consumers were losing confidence in the housing sector.
"Interest rates have come down since November 2011 and there is a recognition that the home-buying environment has improved in 2012," he said.
"However, households remain reticent to actually make a decision to buy.
"This situation is especially evident in the new home building sector where excessive taxation instills a bias against new housing relative to existing property."
Dr Dale said detached house sales were an important factor in the weak trend, falling 3.5 per cent in September, while multi-unit sales fell 4.2 per cent.
He added that despite the numbers, it was possible that some good news could be on the horizon for prospective home buyers.
"Interest rate cuts should help foster a recovery in new home sales in the December 2012 quarter, along with new home incentives for first time buyers in three states and a nascent recovery gathering legs in Western Australia," Dr Dale said.
"The Reserve Bank of Australia needs to play its part by cutting rates again next Tuesday - a renewed easing of rates in October that is not followed up could add to household uncertainty and, perversely, further damage confidence."
The RBA cut the cash rate by a quarter of a per cent - to 3.25 per cent - in October.