THE construction industry in Scotland said it was "frightening" that new figures reveal the rate of housebuilding is at its lowest in 16 years.
Calls have been made for greater investment in the sector after it emerged just 15,900 properties were completed last year – a drop of more than 10,000 since the peak of the market in 2007.
The figures, from the Scottish Government, show the number of new homes built has fallen for the fourth year in a row.
Michael Levack, chief executive of the Scottish Building Federation, said: "The construction of new homes in Scotland is at its lowest ebb since current records began some 16 years ago.
"As a critical sector of the Scottish construction industry and with the demand for new homes continuing to rise, it's genuinely frightening to see housebuilding numbers continuing to slide as they currently are."
The number of private homes that were finished last year fell to 10,039 – less than half the total from 2007-08 of 21,663.
Mr Levack said: "The housing sector urgently needs an injection of additional direct capital investment. If we can't start increasing the number of new homes we build, we should at the very least be creating far greater incentives for owners to repair and maintain their existing properties so as to improve our building stock and help construction firms retain jobs."
Housing Minister Keith Brown painted a more positive picture, claiming he was "encouraged" by the increase in the number of private properties where construction began.
Work started on 10,732 such homes in 2011-12, up from 8731 the previous year and the first rise (23%) in five years.
The number of council homes built also increased, with local authorities completing 1085 new homes last year, up from 614 the previous year.
Mr Brown said: "I am encouraged with the increase in the number of private-sector houses started in the last year, although these remain very challenging times. High deposit requirements and reduced mortgage availability are continuing to prove a barrier to recovery."
The Scottish Government has pledged to deliver at least 30,000 affordable homes during the lifetime of the Parliament.
A total of £115m has been allocated to local authorities to create 4400 council homes.
The number of new homes started by housing associations more than halved from 4656 to 2175 over the same period.
Industry body Homes for Scotland also welcomed the rise in private properties that were started last year. But chief executive Philip Hogg said: "This information jars with the feedback we are receiving from our member companies as well as other industry statistics which continue to indicate a very weak picture. Completions remain the ultimate measure of production and these show private-sector activity is continuing to fall and remains still less than half that of pre-downturn levels."
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