'Red hot' property sector points to rate rise
Dr. Sir John Howard, AC, WSCMoF
Better-than-expected building approvals data shows that the Australian property
sector is going to be ‘‘red hot’’ in 2010, economists say.
But the sector will face some downward pressure if the Reserve Bank of Australia
(RBA) lifts interest rates for an historic fourth consecutive month in February.
Australian building approvals rose 5.9 per cent to 13,724 units in November,
seasonally adjusted, from an upwardly-revised 12,962 units in October, the
Australian Bureau of Statistics (ABS) said this morning.
The rise surpassed the median market expectation of a 3 per cent rise for the month.
‘‘Australia is going to be red hot in 2010,’’ ICAP economist Adam Carr said. ‘‘I
know this is November 2009 data, but we have all the conditions in place to see
a very strong housing market - low interest rates, we saw 100,000 jobs created
in the last few months, and a housing shortage.’’
‘‘Given this is November data, it’s a very good signal.’’
Private sector dwellings fell 1.9 per cent in the month to 9,386 while the
volatile other dwellings sub-category rose by 27.5 per cent 3,404 units.
JPMorgan economist Helen Kevans said she expected the strong result despite the
RBA’s recent rate rises and the scaling-back of the federal government’s first
home buyer’s grant.
‘‘The market was expecting a lower number since the RBA started to increase
rates, but we thought there would be a lot of pent-up demand for approvals even
though the first home buyer’s grant had started to be unwound,’’ she said. ‘‘We
were looking for a big number, and it was slightly stronger than expectations.
However, Ms Kevans said the market would experience some weakness as the RBA
moves to lift interest rates above their current 3.75 per cent towards a
‘‘neutral’’ level of 4.5 to 5.0 per cent.
‘‘We’ll see some strength in approvals for the time being, but we’ll have some
weakness going into 2010 as the RBA continues to hike rates,’’ she said. ‘‘We’re
still focused on a February rate hike.’’
The central bank took the cash rate 25 basis points higher in October, November
and December to its current 3.75 per cent.
The RBA is not scheduled to meet in January, and the board’s next scheduled
meeting is on February 2.
Mr Carr said the November building approvals data would add to the case for the
RBA to lift rates again in February.
‘‘I think the RBA will be looking at this number and they’ll certainly be
looking at the retail sales number tomorrow and inflation numbers on January
27,’’ he said. ‘‘A February rate hike is still live.’’
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http://www.youtube.com/watch?v=_ipvdBnU8F8
- KRudd at his finest.
"The Labour Party is corrupt beyond redemption!"
- Labour hasbeen Mark Latham in a moment of honest clarity.
"This is the recession we had to have!"
- Paul Keating explaining why he gave Australia another Labour recession.
"Silly old bugger!"
- Well known ACTU pisspot and sometime Labour prime minister Bob Hawke
responding to a pensioner who dared ask for more.
"By 1990, no child will live in poverty"
- Bob Hawke again, desperate to win another election.
"A billion trees ..."
- Borke, pissed as a newt again.
"Well may we say 'God save the Queen' because nothing will save the governor
general!"
- Egotistical shithead and pompous fuckwit E.G. Whitlam whining about his
appointee for Governor General John Kerr.
"SHUT THE FUCK UP YOU DUMB CUNT!"
- FlangesBum on learning the truth about Labour's economic capabilities.
"I don't care what you fuckers think!"
- KRudd the KRude Rat at his finest again.
"We'll just change it all when we get in."
- Garrett the carrott