Western Australia's residential construction is forecast to decline from recent all-time highs, according to a Housing Industry Association report.

The HIA state outlook report for WA predicts a 22 per cent drop in residential construction by 2017/18, as the state’s mining downturn continues.

HIA executive director John Gelavis said weakening mining investment meant new home building had become an important source of economic growth for the state.

“The market will take some time to adjust to the economic conditions in the post mining boom era,” Mr Gelavis said.