Australian sales of newly built homes slumped to the lowest level on record in August, a private report showed, underscoring the central bank’s decision to resume lowering interest rates.
Sales decreased 5.3 percent to 5,383 from July, when they dropped 5.6 percent, the Canberra-based Housing Industry Association said, citing a survey of the nation’s largest builders. Detached house sales fell 5.8 percent, while apartments slipped 2.5 percent, it showed.
“New home sales for August are the latest in a string of soft new housing updates for this financial year,” Harley Dale, HIA chief economist, said in a statement. “A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome.”
The Reserve Bank of Australia reduced its overnight cash- rate target by a quarter percentage point to 3.25 percent yesterday, ending a three-meeting pause, as it seeks to revive industries outside a resource boom. Traders are pricing in a 67 percent chance the central bank will cut by a quarter percentage point to 3 percent next month.
The number of seasonally adjusted new detached house sales in August fell by 7 percent in New South Wales, 8.6 percent in Victoria, 2.9 percent in Queensland, 2.6 percent in South Australia and 9.4 percent in Western Australia, the report showed.
Even so, Australian home prices climbed by the most in 30 months in September as the central bank’s earlier rate reductions began to take effect, according to RP Data.
House and apartment prices across Australia’s eight state and territory capitals rose 1.4 percent in September from the previous month, the most since March 2010, the RP Data-Rismark Home Value Index showed yesterday. They also rose 2 percent in the three months ended Sept. 30 from the prior quarter, the Brisbane-based researcher said.
The RBA reduced the benchmark by 150 basis points since last November. A rate of 3 percent would match the level set at the peak of the 2009 global financial crisis that was the lowest rate since 1960.
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