Construction on new homes and units has slumped to its lowest level in a decade, prompting fresh calls from Australia's housing industry for governments to do more to support the struggling sector.
Residential construction slumped 1.9 per cent in the June quarter, in seasonally adjusted terms, to its weakest level since 2002, official figures show.
New residential building work fell by 2.5 per cent compared to the previous quarter while alterations and additions, including home renovations, were down 2.3 per cent.
The Housing Industry Association (HIA) seized on the figures released by the Australian Bureau of Statistics on Wednesday, calling for help from state and federal governments.
HIA chief economist Harley Dale said the sector was faring worse now than at the height of the global financial crisis.
"That situation is unhealthy and undesirable for Australian businesses and households, while federal and state governments are too slow in taking action," he said.
"Federal and state governments need to get out there and act on investment and reform initiatives to help revive the residential construction industry."
But National Australia Bank senior economist Spiros Papadopoulos said the result was unsurprising.
He expected it to take another six months before recent interest rate cuts by the Reserve Bank of Australia (RBA) began flowing through to the housing sector.
The cash rate is currently sitting at 3.5 per cent following the RBA's decision to cut it by a half per cent in May and a quarter per cent in June.
"Given the lag involved in actually getting the building work done, post the approval process, we still think we are a quarter or two away from getting a positive reading coming through on the residential side," he said.
The ABS data also showed a 1.2 per cent decline in non-residential building over the quarter.
Engineering construction, which includes work done in the mining sector, fared better with the total value of work done lifting 0.9 per cent.
However, the rate of growth in that sector was substantially lower than the 15.1 per cent increase recorded in the March quarter.
Overall, the total value of construction done slipped 0.2 per cent in the quarter, well below economists forecasts of a 1.9 per cent rise.
