Approvals for the construction of new homes have fallen 4.9 per cent in June, which was worse than the two per cent decrease the market was expecting.

Approvals for private sector houses were down 5.7 per cent in the month, while those the “other dwellings” category, which includes apartment blocks and townhouses, fell 5.3 per cent.

In the 12 months to June, building approvals were down 15.8 per cent, the Australian Bureau of Statistics said on Thursday.

The ABS said the housing sector is still being dragged down by impact of the COVID-19 pandemic.

“Falls were recorded in all states, and across both detached and attached dwellings,” ABS Assistant Director of Construction Statistics Bill Becker said.