In the private housing sector year-on-year quarterly figures showed a 12% drop from 2265 in quarter one 2012 to 1993 for the same quarter in 2013.
Philip Hogg, chief executive for Homes for Scotland, said the 25% quarterly slump represented the lowest on record.
He said: “Today’s figures reinforce the fact that Scotland is mired in a housing crisis. Less than 14,000 new homes were built in 2012-13 yet our population is at a record level and households are growing by more than 21,000 a year.”
New starts followed a similar downward trend as new housing supply, which includes new build, refurbishment and conversions, decreased by 14% between 2011-12 and 2012-13 from 16,922 to 14,629 units.
Private housing starts for 2012-2013 fell by 6% on the previous year to 9815 although the numbers remained higher than 09-10 and 10-11.
Hogg said: “It is estimated that 465,000 new homes are needed in Scotland by 2035 to meet demand.
“However the build rate announced today points to a shortfall of around 160,000 by this time. With this equal to the number of people currently already on housing waiting lists such an outcome would have severe long-term social and economic consequences.”
In Glasgow 44% of the new supply was housing association homes with the remainder split between private new build, refurbishments and conversions.
The majority (59%) of the new supply in Edinburgh was from private sector new build with a further third from housing association new build.
Aberdeen, with its oil-based micro economy, had the strongest private sector performance with almost 90% of its new housing supply made up of private homes.
Hogg said that although government policies in England have lit a fire under the housing market in England, the Scottish government has done little to get the market moving north of the border.
He said: “In particular we need to see the Scottish government’s promised £120m shared equity scheme launched as soon as possible and proposals to increase regulation and cost which threaten to further depress housing supply be reconsidered.
“If such action is not forthcoming the cautious optimism which was apparent in the first half of the year could easily disappear with investment channelled elsewhere.”
