House approvals in the country dropped by 0.5% in May, in trend terms, on the back of a decrease in private sector houses.

"The overall decrease was driven by a decline in private sector houses, which fell 1.3% in trend terms," said Daniel Rossi, director of construction statistics at Australian Bureau of Statistics (ABS). "This was partially offset by an increase in private dwellings excluding houses, which increased 0.6%."

ABS data showed that total dwelling approvals fell in the Northern Territory (6.1%), Tasmania (3.9%), Victoria (1.5%), Western Australia (0.7%), and New South Wales (0.7%), in trend terms. On the other hand, the Australian Capital Territory (7.2%), South Australia (0.4%), and Queensland (0.4 %) have recorded increases.

The continued slowdown in the eastern states drove the dip in approvals for private sector houses. New South Wales (2.9%), Victoria (1.3%), Western Australia (0.7%), and Queensland (0.1%) posted drops. South Australia, meanwhile, was flat.

In seasonally adjusted terms, however, total dwellings rose 0.7% in May, with a jump in Victoria (14.4%) contributing to the national increase.

"The May building approval figures were slightly above expectation," said Maree Kilroy, an economist at BIS Oxford Economics.

Queensland (6.3%), Western Australia (4.7%), South Australia (2.9%), and Tasmania (1.2%) registered declines, while New South Wales was flat.

Private dwellings excluding houses climbed by 1.2%, while private house approvals decreased by 0.3%.

The value of total building approved declined by 0.2%, in trend terms. The value of residential building decreased by 0.6%, while non-residential building rose 0.3%.