The level of work commencing on building new houses has fallen by 58% in August compared to the same period last year.
Registration figures released today show the annualised rate of housing starts was running at 44,500 on average, compared to 94,500 in the same period in 2006.
The figures have prompted Davy Stockbrokers to scale back estimates for the number of houses which will be built next year from 65,000 to 55,000.
Due to the lower level of investment in housing the stockbrokers has reduced its estimate for economic growth from 3% to between 2.5% to 2.75% for next year.
