Figures released by the Housing Industry Association (HIA) show that building approvals fell again in August, making the current slump the longest downturn in history.

Dwelling approvals fell 1.7 per cent and apartment approvals dropped by seven per cent, to fall back below the 4,000 mark for the first time in three months.

The biggest drop in building approvals were in Tasmania, down 3.4 per cent and Western Australia, down two per cent. Approvals were up 2.5 per cent in Victoria, 0.9 per cent in the Northern Territory, 0.5 per cent in Queensland and 0.3 per cent in South Australia. There were slight declines in New South Wales, 0.9 per cent and in the Australian Capital Territory, 0.8 per cent.

According to Fisher & Paykel national marketing manager, Peter Russell, the results are strongly related to interest rates and nervousness in the market.

“Any discretionary spending is being directed to lifestyle entertainment products,” Russell told

He said replacement sales for whitegoods was slow although renovations had picked up.

“Sales for larger capacity fridges are not buoyant. The housing boom in WA is definitely cooling.”

HIA chief economist, Harley Dale, said building approvals were marching towards four full years of weakness.

“It has never taken approvals this long to mount a sustainable recover and that is a clear reflection of the brake that record low housing affordability is exerting on the new home building sector,” he said.

“A rate hike and the full impact of the global credit crunch striking were not positives for approvals in August. It is the hefty supply constraints on housing construction, however, that are preventing a recovery in the housing sector,” Dale said.