Consents for new homes have fallen to the lowest level since records began - 1982.
Statistics New Zealand (SNZ) said the number of new homes authorised, including apartments, has fallen 28% since April to be at its lowest point since 1982.
In March consent were issued for 1047 new homes - excluding apartments - and 40 new apartment units.
The figures came as no surprise to Registered Master Builders Federation (RMBF) chief executive Warwick Quinn.
"The construction sector is well into its third year of recession and the contraction is picked to continue for most of the year," he said.
Citing the Canterbury earthquake rebuilding, the Auckland housing shortage and the leaky home repairs he said the "continuing loss of capability" at the exact time it is needed is a serious issue.
"It is imperative the construction sector does not contract further as the industry will struggle to cope when the market eventually responds. We simply cannot afford to lose any more skilled trades people at a time when we need them the most."
SNZ figures revealed of the 16 regions, fewer new homes were authorised in 12 of them while Canterbury, Waikato and Otago saw the greatest falls.
The value of consents issued for residential buildings stood at $420 million in March 2011 down 20% on the year earlier.
The value of non-residential buildings fell 0.2% to $344 million.