A new batch of weak building data is being paraded as evidence of government "folly" in pledging a return to surplus.
ABS figures has shown a 10.7% drop in building approvals for October, and HIA chief economist Harley Dale said the numbers solidify the need for further rate cuts and government stimulus for the sector.
"This outcome vindicates the November interest rate cut, justifies the case for a further cut next week and highlights the folly of blindly focussing on a budget surplus objective for 2012/13," Dale said.
The fall in approvals followed a downwardly revised 14.2% decline for September. Total approvals now sit 30% below the level of October 2010.
"Today's approvals update is a very weak one which serves to highlight the urgency of acting in late 2011 on both the monetary and fiscal policy front. Such action would both shore up confidence and reduce the risk of housing activity plumbing the depths last seen during the GFC," Dale said.
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