Housing industry groups blame the State Government's failure to release enough vacant land, as well as taxes and charges, for what is expected to be another year of decline in new dwelling approvals.

Since 2002, when 51,980 new dwellings were approved in NSW, there has been a steady decrease in building approvals for new homes, despite the population growing from 6.65 million to 7 million.

From January to November last year 23,642 dwellings were approved. Housing Industry Association chief economist Harley Dale blamed land supply problems and state and local government charges.

"A standard new house-and-land package is more expensive in Sydney than any other capital city," he said.

"Compared to Melbourne, the price differential is in excess of $100,000, and much of that has to do with the fact that taxes and charges are on average higher in Sydney than anywhere else."

The Master Builders Association said the high cost of new land was keeping developers away.

A spokesman for Planning Minister Tony Kelly said there was enough zoned and serviced land ready for 30,000 dwellings, and there was land for a further 27,000 dwellings in Sydney's south-west and north-west.

Opposition planning spokesman Brad Hazzard said the Government's policies had driven builders interstate.