A fourth decline in five quarters has delivered an 11.5 per cent drop in dwelling commencements for the year ending September 2011.
Housing Industry Association (HIA) senior economist Andrew Harvey said private sector detached housing starts have now fallen for five consecutive quarters reflecting the combination of a dawdling rate of policy reform in terms of reducing the high cost of new housing and a deterioration in household confidence.
"In the September 2011 quarter dwelling commencements were running at an annualised level of just under 142,690, a level only 4,000 above the 138,690 dwellings we started in GFC-impacted 2009," Mr Harvey said.
"That's before we consider the continuing weakness in leading housing indicators such as approvals which suggest that commencements look set to fall even further in the quarters ahead.
"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.
In the September 2011 quarter total seasonally-adjusted dwelling commencements fell by 6.8 per cent to 35,672, the lowest quarterly result in two years.
Detached house commencements fell by 2.7 per cent to 22,628, while commencements of 'other dwellings' dropped by 13.3 per cent to 12,760.