Australia Home Loans, Job Ads Fall Ahead of Employment Report

Jan. 14 (Bloomberg) -- Australian home-loan approvals unexpectedly fell in November and help-wanted notices extended declines, weakening the local currency as economists predicted a report later this week will show rising unemployment.

The number of loans granted to build or buy houses and apartments declined 0.5 percent from October, when they rose 0.1 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey was for a 0.5 percent rise. Job advertisements dropped for a 10th month in December, capping the worst skid since the 2009 global recession.

The data underscore the central bank’s decision to lower the overnight cash rate target a quarter percentage point to 3 percent last month, the sixth reduction since Nov. 1, 2011, to spur hiring and revive the housing market. Policy makers are aiming to rebalance Australia’s two-speed economy, where mining regions in the north and west thrive while manufacturers, retailers and builders in the south and east struggle.

The housing finance data “suggest a relapse after tentative signs of improvement,” said Alvin Pontoh, an Asia-Pacific strategist at TD Securities Inc. in Singapore who predicted the result. “The unemployment rate is likely to drift up in the coming months.”

The Australian dollar fell after the data, buying $1.0539 at 12:54 p.m. in Sydney compared with $1.0541 before the report. The yield on 10-year Australian government debt slipped to 3.45 percent from 3.47 percent on Jan. 11.

February Meeting

Swaps data compiled by Bloomberg show a 37 percent chance Reserve Bank of Australia Governor Glenn Stevens and his board will add to last month’s cut in the benchmark rate to 3 percent, which matched the half-century low set during the 2009 global recession.

“It is too early to judge whether RBA has done enough to offset the expected peaking of mining investment,” Pontoh said. “With the global economic outlook improving and iron ore prices back at $150 a ton, the RBA is likely to wait and assess the data flow.”

Today’s housing finance report showed the total value of loans fell 0.8 percent to A$21.5 billion ($22.6 billion) in November. The value of lending to owner-occupiers gained 0.6 percent, the report showed. The value of loans to investors who plan to rent or resell homes dropped 3.3 percent.

First-home buyers accounted for 15.8 percent of dwellings that were financed in November, down from 18.7 percent in October and lower than 20.2 percent a year earlier, the report showed today.

Labor Demand

Jobs advertised in newspapers and on the Internet dropped 3.8 percent last month after a revised 2.8 percent fall in November, according to an Australia & New Zealand Banking Group Ltd. report released in Melbourne today. National vacancies advertised in newspapers weakened 0.4 percent, and Internet notices were down 3.9 percent, the report showed.

Australia’s unemployment rate probably climbed to 5.4 percent in December from 5.2 percent a month earlier, economists predicted before a Jan. 17 government report. Most analysts forecast the RBA will leave the benchmark rate unchanged at its Feb. 5 meeting, a separate Bloomberg survey showed today.

Government data last week showed retail sales unexpectedly declined for the first time in four months in November as consumers spent less on household goods and clothing.

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net