But Jim Wells said Newcastle residents can expect stalled housing projects to re-emerge once conditions improve.
Assembly Member Mr Wells, who also sits as a Down District Councillor, was a vocal opponent of the influx in Newcastle apartments and housing developments in recent years.
Mr Wells instead encouraged the expansion of social housing in the seaside town.
However, the recent economic downturn has meant the high volume of Newcastle developments has dropped, with many units lying empty and incomplete.
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Mr Wells said the situation was not helped by the practice of 'garden grabbing', which saw developers purchase homes with gardens in order to build apartments on the space.
The MLA said: "There have been far too many units built and alongside the fact that developers paid ridiculous prices for land during the past year, it does not look good for them at present.
"Activity in the housing market has slowed and in fact mortgage activity is down 70% on last year."
However, Mr Wells stressed that Newcastle residents cannot rest easy.
He said once permission for a building application was granted the developers have approval, and have the flexibility to "wait a couple of years, until the market picks up, before building".
"The application can be renewed so the 'Sword of Damocles' is still hanging over residents.
"There remain 17 applications pending for apartments in Newcastle alone," he added.
The Assembly Member said there was still a desperate need for substantial numbers of social housing and Housing Executive units in Newcastle.
Mr Wells insisted this was not something he would "stand in the way of", as the seaside town has a "pitifully low amount".
"It would be a great help if some of these developers were to offer land or even units to the Housing Executive or for social housing so that people who needed housing, could get it," he added.
(PR)
