New housing approvals have fallen to their lowest levels in more than two years.

Australian Bureau of Statistics figures show dwelling approvals dropped by 15% in the 12 months to March – the weakest yearly result since October 2020.

BIS Oxford Economics senior economist Maree Kilroy says soaring costs, lower borrowing capacity, and growing cost-of-living pressures means many are unwilling to commit to a new home.

“The start of 2023 has been poor,” she says.

“A protracted downturn for dwelling approvals is forecast that extends through 2023 and into 2024. We believe the probability of government intervention to support housing supply is increasing.”

The figures show approval for standalone homes fell every month in the past year and are down 17.3% on this time last year.

Units, apartment and townhouse approvals rose 5.7% in March but are 11.1% below the same time last year and at their weakest levels since April 2021.

The value of renovations approved also dropped by 7.4%.