AS HOUSING development in NSW all but dries up, the federal minister will today announce about 1000 new low-cost houses and apartments to be made available for the state's renters.

Councils across the country approved 26 per cent fewer houses and apartments for development in October than in the same month last year, showed a Bureau of Statistics report released yesterday.

In NSW, a record low of 1050 houses were approved for development, as restricted bank lending exacerbated the slow decline of the state's construction industry.

But while developers struggle with tight credit and flagging demand from new home buyers, rents continue to rise, particularly in areas where families might struggle to afford to buy property.

Estate agents report a tight rental market in areas with high migrant and young populations, such as Bankstown and Liverpool.

The slump in building approvals precedes the announcement today by the federal Housing Minister, Tanya Plibersek, that the Government will offer tax incentives to developers to build up to 4000 houses or apartments for lease at 20 per cent below the market rate.

The properties will be the first sponsored under the National Rental Affordability Scheme, which aims to create up to 50,000 affordable homes. Developers or community housing groups can claim the tax breaks if they build properties, or have already built houses or apartments but not yet leased them.

"We're expecting to see the first families moving into [the scheme's] homes in coming weeks," Ms Plibersek said.

In NSW, the program will offer incentives for 507 affordable properties today, with another 567 likely to be offered soon.

In another indication of the slump in consumption, new car sales in November slumped by 9.5 per cent from the previous month, to 71,617.

The sales figure was 22 per cent lower than the previous November.