Approvals for the construction of new homes fell 5.2 per cent in May, which was worse than market expectations of a 3.5 per cent drop.

Over the 12 months to May, building approvals were down 9.1 per cent, the Australian Bureau of Statistics has said.

Approvals for private sector houses rose 0.1 per cent in the month, and the ‘other dwellings’ category, which includes apartment blocks and townhouses, was down 11.3 per cent.