Approvals to build new homes in Australia collapsed to five-year lows in December as sliding house prices and a squeeze on credit hammered the apartment market, a blow to what had been one of the economy's stronger sectors.
Monday's grim data knocked the local dollar lower as it intensified pressure for a cut in interest rates from the Reserve Bank of Australia (RBA) a day before it holds the first policy meeting of the year.
It also highlights the stakes at play when the government releases the findings of the royal commission into financial misconduct later on Monday.
With gun-shy banks already reining in much-needed credit, Prime Minister Scott Morrison has cautioned against going too far with new regulations and thus threatening to choke off economic growth.
"This latest data confirms that tightening credit availability and falling house prices are battering confidence in the residential sector," said Robert Mellor, managing director of BIS Oxford Economics.
"With the final recommendations of the banking royal commission released today, the scales are tipping more towards added downside risk to the residential downturn."
Futures markets imply around a 50:50 chance the RBA will have to cut the 1.5 per cent cash rate by the end of the year, despite its repeated assertions that the next move would be up.
Figures from the Australian Bureau of Statistics showed approvals to build new homes plunged 8.4 per cent in December, which follows a 9.8 per cent dive in November.
Total approvals of 13,995 were down almost 23 per cent from a year earlier and the lowest since mid-2013.
Most of the damage came in the apartment sector, which has enjoyed boom conditions in recent years, but is now the epicentre of a tightening in lending finance.
Approvals for apartments and townhouses shrank to just 4752 in December, the smallest number since mid-2012 and a fall of 38 per cent from the same month a year earlier.
While approvals can be volatile, especially over the turn of the year, the slowing trend augured ill for growth given home building had many spillovers to the broader economy from jobs to furnishings.
A separate survey from Australia and New Zealand Banking Group out on Monday showed job advertisements in newspapers and on the internet fell 1.7 per cent in January, taking annual growth into negative territory for the first time since 2015.
"The decline in job ads is consistent with a range of other data suggesting the economy lost momentum in the second half of 2018," ANZ's Head of Australian economics, David Plank, said.
"It is not surprising that this loss of momentum is translating into weaker job ads. This should show up in actual hiring in due course, though employment does lag other parts of the economy."
Australia's labour market has been the star sector of the economy, with the unemployment rate hitting a 6½-year trough of 5 per cent in December.