The ABS also released building approvals for October, which fell by a seasonally adjusted 2.8%, partially reversed the upwardly revised 8.6% rise in September.
Economists had expected a 2.0% fall, but the series has become quite volatile this year as non-private dwelling approvals are bunched together and move into the statistics in large dollops.
This has happened at least three times this year, leading to quite big swings in apparent activity.
A total 13,553 properties were approved in October, including 9,288 private new homes.
The ABS reported:
"The seasonally adjusted estimate for total dwelling units approved fell 2.8% in October following a revised increase of 8.6% in September.
"The seasonally adjusted estimate for private sector houses approved rose 0.9% in October following a revised increase of 3.7% in September. The seasonally adjusted estimate for private sector other dwellings approved fell 5.5% in October following a revised increase of 17.8% in September.
BUT HSBC chief economist John Edwards said the volatile apartment sector drove the overall fall in building approvals and other parts of the market remained on track for recovery.
He said there seems to be a continuation of a slight recovery in home building that started in May of this year.
"We have seen a trend upswing. I would say, despite the fall (in October), the numbers are still consistent with some continuing improvement in the outlook for housing."
The Housing Industry Association's chief economist Harley Dale said the upswing in activity had been modest: "There has been a moderate upward trend apparent for building approvals for nine months now and that is encouraging," he said.
"With upward pressure on domestic interest rates, however, there is probably a greater risk of that trend stalling rather than accelerating in the short term."
But he said the shortfall between supply and demand remained with the number of new homes being built still well short of what is needed and would not provide relief from the housing affordability crisis.
"We are currently averaging less than 13,500 approvals per month which is more than 1,000 short of the monthly level required to satisfy the underlying demand for new dwellings," Mr Dale said.
There's no much of a guide here for building companies and their suppliers.The November rate rise has yet to work its way through. Will that produce a slowing in the weak recovery in the sector?
