Apartment approvals in August dropped by 33.4 per cent to 2,704, in original terms, marking the second lowest monthly figure in the past year.
Of these, only 527 new apartments were approved in New South Wales and 342 in Victoria. Meanwhile, Queensland approved 1,368, followed by ACT with 199, Western Australia with 198 and South Australia with 70.
Townhouse approvals fell 19.1 per cent in August to 2,424 dwellings, below the 12-month average of 2,632.
Property Council Chief Executive Mike Zorbas said while apartment approvals are subject to volatility, the stark drop in August is concerning.
"Our welcome and ambitious national housing target cannot be met without apartment construction delivering housing," he said.
"Only 6,763 apartments were approved in July and August this year, compared to 18,031 during the same period of the 2016 apartment boom. We know we can do better.
"High construction costs, labour shortages and low site productivity are straining the industry's ability to deliver new apartments. Add complex approval processes and investment-punishing state taxes, and you have the perfect storm.
"The recent NSW approval reforms are an example of state policy improvements we are seeing across the nation, but we also need governments to lower taxes on institutional investment into apartment construction if we are to have a hope of dialling up housing supply.
"It is also high time we brought student accommodation into the calculations for our national housing targets.
"In an age of targets, what gets measured is more likely to get the policy and delivery support that is needed from state governments."
