Sales of new homes have fallen for the first time in five months but it is believed to be only a temporary setback.
New home sales fell 4.7 per cent July, seasonally adjusted, the Housing Industry Association (HIA) said on Thursday.
HIA chief economist Harley Dale said there had been strong gains in housing construction earlier in the year.
"One monthly fall, while disappointing, does not really change the story," he said.
"That having been said, the re-emergence of a sustained decline for new home sales over the second half of the year would, obviously, be a negative signal for residential construction and the wider Australian economy.
"To be confident that actual new home construction will grow in 2013/14, we need to see clear and consistent evidence of further upward momentum in leading indicators such as new home sales."
Dr Dale said housing construction was still at quite low levels.
"It remains the case that detached house sales are running well below long-term average levels," he said.
Sales of new detached house fell 6.4 per cent in July, the first decline since February.
Sales of flats, townhouses and semi-detached houses were up 7.2 per cent in July, following a 17.5 per cent fall in June.
