Approvals for the construction of new homes fell for a second consecutive month, but it was mainly driven by a decrease in the volatile multi-unit blocks category.

Home building approvals were down 3.5 per cent across Australia in March, following a 5.4 per cent fall in February, the Australian Bureau of Statistics said on Monday.

Approvals for private sector houses fell 0.7 per cent in the month, and the ‘other dwellings’ category, which includes apartment blocks, was down seven per cent.

JP Morgan economist Tom Kennedy said although the figure was weaker than expected, the data was prone to volatility.

“The good news is that when you look into the data, it’s mainly due to a decline in high residential building approvals and that component is often quite volatile on a month-to-month basis,” Mr Kennedy said.

“We’ve got a decline this month but in the back half of 2013, we saw some pretty strong increases there, so it just shows this sector does move around a little bit and one month certainly doesn’t make a trend in this category.

“All in all, this is a little softer than we expected, but we still expect that uptrend in the construction sector is going to continue moving forward and it’s certainly not a game changer at this stage.”

Over the 12 months to March, total building approvals were up 20.0 per cent.

Westpac senior economist Matthew Hassan said the number of building approvals was still quite high despite the second monthly fall.

“It’s broadly in line with our view that approvals were topping out after a very strong surge last year,” he said.

“We now have the trend in building approvals flattening out but it’s not particularly weak anywhere.

“We’ve had a bit of a dip for a couple of months but we’re set for a very strong year for new construction.”