New home sales have suffered their largest fall this year as banks tighten requirements for mortgage customers.
Housing Industry Association data show that new home sales fell four per cent in September, after rising 2.3 per cent in August.
But, HIA economist Diwa Hopkins said, sales activity has trended only very modestly lower and remained historically high, boding well for actual new home building activity in the current financial year.
"There is a decline but, overall, the level of activity is still only just below the recent peak and there's still a strong pipeline of work yet to commence construction," she said.
However, tighter lending policies are likely to weigh more heavily on new home building activity beyond 2015/2016, and HIA has pared back its forecasts for that period.
"Increasingly restrictive credit conditions are likely to curtail the boom in new home building," Ms Hopkins said.
Australia's big banks have raised interest rates for investors and owner occupiers in response to the Australian Prudential Regulation Authority's push to have banks reduce leverage.
Detached house sales dipped 3.6 per cent in September, with falls in four of the five mainland states. Multi-unit sales slumped 5.3 per cent.
It comes as a new National Australia Bank survey also suggests that some steam is coming out of the housing market, with sentiment softening.
The NAB Residential Property Index fell seven points to 10 points in the September quarter - its second consecutive fall.
Expectations for future price growth and rents were scaled back in most states, while Queensland is tipped to lead the country for price and rental growth over the next year or two.
