Approvals for the construction of new homes rose 0.4 per cent in August, helped by a rebound in the volatile apartment category.
The increase was, however, less than the 1.2 per cent rise that economists had been expecting.
Approvals for private sector houses slipped 0.6 per cent in August, while permits in the 'other dwellings' category, which includes apartment blocks and townhouses, were 4.8 per cent higher, data from the Australian Bureau of Statistics showed on Tuesday.
Total dwelling approvals are now down 15.5 per cent over the 12 months to August.
While housing construction activity has continued to be supported by record low interest rates and strong population growth, rising household debt has worried regulators.
The Australian Prudential Regulation Authority tightened investor lending rules in March, forcing major lenders to increase rate and make investor loans more expensive.
The Australian dollar slipped on the lower-than-expected approval numbers.