Canberra's construction industry has called on the government to release more land as the number of new dwellings fell to a six-year low in March, dealing a blow to the territory's first home buyers.
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There were only 201 dwelling units approved in the ACT in March in trend terms, including apartments and private homes, according to the Australian Bureau of Statistics.
This was the lowest number of dwellings approved in just over six years, since only 205 were given the go-ahead in February 2009.
It is the latest in a series of bad economic news in the ACT, after house prices dropped below the national average in February this year.
Master Builders' Association ACT executive director Kirk Coningham said the territory's construction industry was at a low ebb.
"The central issue to that is land supply and getting land released to market for development for development," he said.
"You'd find a direct relation between land supply and the low number of dwelling approvals."
Mr Coningham said the low number of dwelling approvals impacted on both the construction industry and first-home buyers.
"The construction industry is the largest private sector industry in the ACT," he said. "This really impacts on them very severely to the point where they start looking to the point of moving outside this jurisdiction."
Mr Coningham said the government needed to schedule more land releases in Canberra over a period of time to increase confidence in the industry.
"It's the ebbs and flows that are the big issues for the industry," he said. "It's the continuity of supply... I think we'll get some slight pick up, you're starting to see some signs of that [but] it would be better for business if there was some clear idea of what was being anticipated and when."
Chief Minister Andrew Barr said the cooldown in approvals was inevitable after the record growth over the past seven years.
"It was always anticipated that the above average approvals level would reduce over time," he said.
"The current level of annual approvals remains in line with the 10-year average.
Mr Barr said the government would use the upcoming territory budget to encourage new dwelling construction through urban renewal.
