Recent data by the ABS reveals monthly housing construction approvals in August are at the lowest level since October 2016.
When seasonally adjusted, only 16,477 dwellings were approved for construction in August, down 9.4 per cent from July and 13.6 per cent from the same time last year.
The decline was led by a 17.2 per cent decrease in unit approvals which brought the total to 23.7 per cent lower than the same time a year earlier.
Australia’s Housing Industry Association expects a 10.6 per cent decline in home building come 2019.
“Just as apartment construction drove the increase in home building to record levels, approvals data is signalling that apartments will lead the decline,” HIA economist Diwa Hopkins said.
The effects of the royal commission can still be felt as banks further tighten their lending policies following tighter APRA constraints. The reduction in lending has also stifled aspiring homeowners to secure finance.
The data comes after the recent announcement from a number of major Australian banks stating an increase in their variable mortgage rates.
A decline in population growth has proven to be another factor underpinning the decrease in dwelling approvals.
“Population growth has slowed since the government introduced stricter visa requirements last year," Hopkins said.
"As global economic conditions improve, skilled migrants who might otherwise consider immigrating to Australia could be more inclined to look to other similar advanced economies where entry requirements are less restrictive.”
Following the decline in unit approvals, detached houses have dropped by only 1.7 per cent since July and 4.2 per cent since the previous year.