While the Housing Industry Association (HIA) predicted a 6.6% decline in residential building activity for 2005-06, the latest result seems to have at least partially stemmed a drop in activity - new residential building actually fell by 5.3% over the period. The HIA's chief economist Harley Dale stressed that the Australian building industry is certainly not out of the woods yet. "With housing affordability still languishing at or near record lows the short term outlook is for further weakness in new home construction," he said. Around the nation, Tasmania led the charge in new residential building activity, up 10.6% for the June quarter, while Western Australia posted an improvement of 6.4%. South Australia was close behind, with a 5.9% increase, while more modest gains of 3.6% and 2.1% were recorded for Victoria and New South Wales respectively. It wasn't good news in all states - activity remained flat in Queensland, and fell by 5.1% in the chronically oversupplied Australian Capital Territory housing market.

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