Australia Home Sales Rise 2012.03.30

March 30, 2012 23:59

Australia new home sales increased a seasonally adjusted 3.0% in February 2012 from the month before, according to the Housing Industry Association (HIA) new home sales report on Friday. The increase followed a 7.3% drop in new home sales in January 2012 due to regional weaknesses mainly in Victoria. In February, detached home sales gained 2.2% while multi-units went up 10.5%.

HIA Chief Economist, Dr. Harley Dale added, “Looking beyond just one month, however, there is much work to be done to see new home sales volumes back at healthy levels across the country. In a contemporary economic environment where interest rate settings are too high, finance conditions persistently tight, consumer and business confidence too low, and plans to tighten fiscal policy inappropriate, it is hard to envisage a sustained recovery in new home sales in coming months.”

In other country news, Australia’s credit provisions by financial intermediaries to the private sector increased a seasonally adjusted 0.4% in February 2012, according to the Reserve Bank of Australia report on Friday. The rise follows a 0.2% increase in January. Additionally, over the year to February total credit increased 3.5%. More specifically, housing credit gained a seasonally adjusted 0.4% month-over-month in February and 5.3% over the year to February. Other personal credit rose 0.3% month-over-month in February and lowered 1.1% over the year to February. As well, business credit went up a seasonally adjusted 0.4% month-over-month in February and 1.2% over the year to February.

The AUDUSD continues to trade sideways between 1.0350 and 1.0400 towards the end of the week as the pair consolidates despite rise in risk appetite. As the S&P 500 crossed 1400 in 2012, the AUDUSD which has been positive correlated to S&P 500 in the past failed to make higher highs. We expect the AUDUSD to correct and rally higher towards resistance at 1.0800 if the equity rally continues.

Eugene Ross, Analyst

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