The number of building consents issued for new houses and apartments in New Zealand continues to fall.
Statistics New Zealand says 1328 new housing units were authorised in August - the lowest monthly total since December 2000.
The trend for the total value of residential building consents has also continued to decline since mid-2007 and is down 33% since then.
Residential building consents issued in August were valued at $457 million, down $308 million from August last year. Non-residential building consents were valued at $362 million, down $36 million.
For the year to August, the value of consents issued for residential buildings fell 13%. The value for non-residential buildings rose 6% over the same period.
Shamubeel Eaqub, an economist from investment bank Goldman Sachs JBWere, says the residential construction sector has deteriorated more sharply than forecast and any expectations of a quick recovery in the market are ill-founded.
Mr Eaqub says aggressive interest rate cuts will be needed and the Reserve Bank has shown it is prepared to do that.
He says high interest rates, tight credit conditions and falling house prices have weakened the construction sector and predicts building consent numbers will stay around current levels for the next three or four months.
Mr Eaqub says the housing market has already fallen to lows New Zealand has not seen since the 1980s, and further declines would be unlikely - although not impossible.
The Registered Master Building Federation says the acceleration of the fall is a surprise, with the decline is most noticeable in Auckland.