The trend in building approvals for new houses and apartments continues to be steadily downwards. This means there is no let-up in sight in the supply-demand pressure which is forcing up house rents.

Data published today by the Housing Industry Association (HIA) shows that new dwelling approvals across Australia fell 11% in March, largely because of a big decrease in approvals for apartments (compared to February).

This monthly result is, in itself, meaningless. What is meaningful is the longer-term trend - which shows a steady decline in new homes being built.

There was some hope in the building industry around the middle of last year, when there were four consecutive months of rising building approvals. But then three interest rate rises in rapid succession bit hard.

Since July 2006 approvals have been once again trending downhill. The HIA's Harley Dale notes in today's report: "The trend in approvals for houses has declined for six consecutive months." Overall, approvals dropped 10% in the year to March.

In March 2004 there were almost 16,000 new dwellings approved. In March 2007 the number was less than 12,000. The HIA continues to blame "government-imposed barriers to home building" for the absence of a recovery in the home-building industry.

Footnote: the results with approvals for new apartments show the folly of reading too much in one month's figures. In February, approvals for home units rose 26%, prompting some to declare a recovery. But in March apartment approvals fell 29%, wiping out the February gains.