A new research by the Housing Industry Association (HIA) titled 'HIA-COLORBOND® steel Housing 100 Report' has shown that the number of new houses constructed by Australia's top 100 builders have fallen to an equivalent 7.3 per cent to 48,130 in 2011/12, the group's lowest level since 1996/97.

Released on Tuesday, the report revealed that Australia's largest 100 builders started only 35,909 houses in 2011/12, compared with the previous year's 40,183 houses, representative of an 11 per cent decline.

"This result is consistent with the overall experience of the industry in 2011/12 where new home building conditions weakened considerably across Australia," said Harley Dale, HIA chief economist.

Although the largest 100 builders controlled a 35 per cent share of Australia-wide housing starts in 2011/12, up from 33 per cent in 2010/11, it was however still below the historical average of 36 per cent, according to the HIA.

"The HOUSING 100 and the entire industry can deliver, and indeed Australia's residents have the requirement for, a considerably higher level of housing starts than has been evident over the last couple of years," Mr Dale said.

"Within an environment of subdued demand conditions, both unilateral and cooperative policy reform could generate a much healthier year for new home building in 2012/13. Sadly, evidence of the will to execute such policy action remains far slimmer than Australia requires," he added.

The number of units and townhouses constructed by Australia's largest 100 builders in 2011/12 rose 4 per cent from 11,720 to 12,221.

The HIA report ranks the nation's top 100 residential builders based on the number of homes started each year.

HIA named Melbourne-based Metricon Homes for the second year in a row as the largest home builder in Australia, producing 2,821 detached houses in Victoria, New South Wales, Queensland, and South Australia over the year.

Second was Alcock/Brown-Neaves Group with 2,736 starts and BGC (Australia) at third with 2,692 housing starts.