May 29 (Bloomberg) -- Australian sales of newly built homes surged in April by the most in more than two years as buyers anticipated the central bank would lower borrowing costs, a private report showed.
Sales rose 6.9 percent in April to 5,816 from a month earlier, when they dropped 9.4 percent to a record low, the Canberra-based Housing Industry Association said, citing a survey of the nation’s 100 largest builders. Detached house sales advanced 6.4 percent, while apartments surged by 10.3 percent, it said.
Reserve Bank of Australia Governor Glenn Stevens unexpectedly cut the benchmark interest rate May 1 by half a percentage point to 3.75 percent, the deepest reduction in three years. Stevens reduced the overnight cash rate target by a quarter point each in November and December to buttress the housing market, encourage hiring and boost consumer confidence.
“Even with this latest improvement, the aggregate volume of both new home sales and local government building approvals imply that in the absence of a rapid and sustained recovery, national new-home building is heading to a recessionary level in 2012,” Harley Dale, HIA chief economist, said in a statement. “Further interest rate cuts are required and the Reserve Bank should just get on with the job.”
Australian house prices declined in the three months through March in the longest losing streak in at least a decade.
An index measuring prices for established houses in eight major cities dropped 1.1 percent last quarter from the previous three months, when it fell a revised 0.7 percent, the Australian Bureau of Statistics said in a May 1 report. House and apartment prices slumped 4.5 percent in the eight cities in April from a year earlier, according to real estate researchers RP Data and Rismark International.
To contact the reporter on this story: Michael Heath in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Brendan Murray at email@example.com