The Australian Bureau of statistics, on Tuesday came out with the Building approval figures of December. The figures were quite disappointing as the rate touched its 5 month low. The building approvals were 14,045 units in January, down by 7 percent, as compared to healthy figure of 15,106 in December.

This fall was the first decline in the last 5 months, as there had been an upward trend in the second of last year. Prospective buyers ran away from buying new homes on the news of increasing interest rates and the backing off of many first home buyers. This fall was quite against the expectations of the economists who had predicted a 1 percent rise in approvals during January.

The new housing activity has started declining because of the reversal of the stimulus packages that were announced during recession. The house prices are expected to rise with an increased pressure in the rental market as the monetary and fiscal policy is expected to tighten.