Apartment consent numbers dropped by 63 per cent in November 2007 compared to the previous November, in figures released by Statistics New Zealand.
Excluding apartments, new dwelling numbers rose by 3.4 per cent, but the trend since midway through 2006 has been downwards.
Master Builders Federation president Ashley Hartley said the softening had been predicted for some time, and the apartment slowdown was leading the way.
A catch-up period of apartments bought off plans and now reselling was also having an effect: "Apartments are starting to take a tumble."
The positive side in the statistics was that the value of consents was increasing, Mr Hartley said.
Consents issued in November totalled $695 million in value, up 4.2 per cent from the same month in 2006.
"People are obviously building bigger and better quality. It has to do with material costs too, but the construction spend in New Zealand is still at a healthy level."
The numbers over the past five months showed values of consents slipping in line with the volume, but Mr Hartley noted the recent decade had been mostly strong growth.
"It [the current slowdown] has probably given everybody a bit of a breather."
The economic situation in America was bound to have an impact sooner or later, and was starting to affect the Australian market, Mr Hartley said.
There were many regional differences and different areas felt the cycles at different times.
Auckland "kept rolling along" with the most new consents, alongside Manawatu-Wanganui, while fringe areas and provincial centres were feeling a different mood.
Northland, Hawke's Bay and Waikato had the largest decreases.
Mr Hartley said the next two or three months would be telling as, with few apartment consents due, the real state of the residential building market would come through in the numbers.