AUSTRALIA'S home-building approvals unexpectedly surged in November by the most in nine months as higher employment, wages and immigration spurred investment.
The number of approvals to build or renovate houses and apartments rose 8.9 percent from October when they slipped 3.6 percent, the Bureau of Statistics said in Sydney yesterday. The median estimate of 15 economists surveyed by Bloomberg News was for no change. The increase was driven by apartment building.
An acceleration in construction increases pressure on the central bank to raise borrowing costs to stem inflation, already above its three-percent ceiling. Yesterday's report also suggests investors may be switching into property amid stock-market volatility that saw Australia's benchmark index drop almost 10 percent since the start of November.
This "could add to the case for a further rate increase" when central bank policy makers meet next month, said Joshua Williamson, senior strategist at TD Securities in Sydney. "The residential housing market looks like a place to be" for investors concerned about the stock market, he said.
Building approvals surged 14.6 percent in November from a year earlier.
The Australian dollar rose to 87.48 US cents at 12:29pm in Sydney yesterday from 87.21 US cents immediately before the report and 87.44 US cents late in Asia on Monday.
The yield on the Australian government two-year bond rose three basis points to six percent. A basis point is 0.01 percentage point.
The rise in building approvals comes even as fuel prices surged and the central bank raised its benchmark lending rate to an 11-year-high of 6.75 percent in November.
Reserve Bank of Australia policy makers, headed by Governor Glenn Stevens, will review rates next month after leaving the benchmark unchanged in December on concern financial-market losses triggered by the American housing slump could spark a recession in the world's biggest economy.
Australian rate increases in November and August each added about A$42 (US$37) a month to the average A$250,000 home loan, according to the Housing Industry Association.
Rental vacancy rates are averaging 1.7 percent and are "unlikely to improve significantly during 2008," the Real Estate Institute of Australia said last week.
Yesterday's report is "very welcome from a renter's point of view, because there's a big shortfall for rental accommodation in Sydney," said Michael Workman, Commonwealth Bank of Australia's senior economist in Sydney.
Lending to consumers and businesses rose by the most in five months in November, according to a central bank report on December 31.
The economy expanded 4.3 percent in the third quarter from a year earlier, the fastest annual pace in more than three years. Employment has risen every month since October 2006, the longest run of job gains since 1980.
A report to be released today will probably show retail sales gained for a sixth month in November, increasing pressure on the central bank to raise interest rates.
Shanghai Real Estate market
Shanghai (Chinese: 上海; Pinyin: Shànghǎi; Shanghainese: /zɑ̃'he/; abbreviation: 沪; nickname: 申), situated on the banks of the Yangtze River Delta in East China, is the largest city of the People's Republic of China and the eighth largest in the world.[4] Widely regarded as the citadel of China's modern economy, the city also serves as one of the nation's most important cultural, commercial, financial, industrial and communications centers. Administratively, Shanghai is a municipality of the People's Republic of China that has province-level status. Shanghai is also one of the world's busiest ports, and became the largest cargo port in the world in 2005.
Originally a fishing town, Shanghai became China's most important city by the twentieth century and was the center of popular culture, intellectual discourse and political intrigue during the Republic of China era. After the communist takeover in 1949, Shanghai languished due to heavy central government taxation and cessation of foreign investment, and had many of its supposedly "bourgeois" elements purged. Following the central government's authorization of market-economic redevelopment of Shanghai in 1992, Shanghai has now surpassed early-starters Shenzhen and Guangzhou, and has since led China's economic growth. Some challenges remain for Shanghai at the beginning of the 21st century, as the city struggles to cope with increased worker migration, a huge wealth gap, and environmental degradation. Despite these challenges, Shanghai's skyscrapers and modern lifestyle are often seen as representing China's recent economic development.
Monday, January 14, 2008
Jobs lead to Australian home run
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