Australian home-building approvals rose by less than economists forecast in January as weakness outside the resources industry hurts housing.
The number of permits granted to build or renovate houses and apartments gained 0.9 percent from December, when they dropped a revised 0.8 percent, the Bureau of Statistics said in Sydney today. The result compares with the median forecast for a 2 percent rise in a Bloomberg News survey of 17 economists.
Reserve Bank of Australia Governor Glenn Stevens lowered the overnight cash rate target by a quarter percentage point on Nov. 1 and Dec. 6, before unexpectedly keeping the benchmark unchanged last month at 4.25 percent. Employment in Australia stalled last year as the currency’s climb hurt non-resource companies and house prices slumped by a record 4.8 percent.
“The housing market remains soft” and “building construction activity remains subdued,” the central bank said in its quarterly monetary policy statement released Feb. 10.
Building approvals in January fell 14.6 percent from a year earlier, the report showed. That compares with economists’ forecast for a 13.7 percent drop year-over-year.
Approvals to build private houses fell 0.1 percent to 7,508 in January from the previous month, the report showed. Approvals for apartments and renovations advanced 1.5 percent to 4,024.
Australia has the highest borrowing costs among major developed nations. The nation’s benchmark rate is “about right for the moment,” with economic growth close to trend as concerns ease that Europe’s debt crisis will disrupt global output, Stevens said in testimony to lawmakers Feb. 24.
Australian house prices plunged by the most on record in 2011 as global economic uncertainty and concerns about its impact at home kept a lid on demand, a government report showed last month.
An index measuring the weighted average of prices for established houses in eight major cities slid 4.8 percent from a year earlier, the Feb. 1 report showed, the biggest calendar-year drop since the data began in March 2002. They fell 1 percent in the three months to December from the previous quarter, when they retreated a revised 1.9 percent.