After a sharp rebound in March, new home sales in Australia plunged in April, showing that the property market is yet to shake off a downtrend that began in the second half of 2015.
According to a report by the Housing Industry Association, new home sales fell by 4.7 per cent in April following an 8.9 per cent surge in March—the biggest since 2010. Unattached housing sales declined three per cent, falling in four out of five mainland states. Among all the regions, only Victoria reported a gain of 14. 3 per cent.
Australia’s housing market is expected to have lower mortgage rates after the Reserve Bank lowered the official interest rate to an all-time low of 1.75 per cent earlier this month in the hopes of addressing deflation. The core inflation rate fell to 1.55 per cent in the first quarter, even though the Australian central bank is targeting an inflation rate between two and three per cent.
Still, the RBA has maintained a robust outlook on the economy for this year. Similarly, ANZ bank said it expects the economy to expand 0.8 per cent in the March quarter—a significant improvement over the 0.6 per cent growth in the December 2015 quarter.
GDP figures are expected to be announced this Wednesday, as well as China’s official manufacturing and non-manufacturing PMI reports, which are relevant to many Australian investors. The Australian Bureau of Statistics is also expected to report on producer inflation, building permits, retail sales, and trade
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