- Glenn Stevens, RBA Governor
Australia's building approvals posted the biggest monthly decline since September 2014, dragged down by a steep decrease in the volatile apartment sector. The Australian Bureau of Statistics reported the number of buildings approved plunged a seasonally adjusted 8.2% to 17,868 in June, much worse than the 0.8% expected by economists. The volatile apartment sector plummeted 20.4% in the reported month, whereas the more stable detached house sector saw a 4.3% increase in approvals to 9,661. Nevertheless, over the 12 months to June, building approvals surged 8.6%. Over the same period apartment approvals have surged 16.3%, while approvals for private sector houses rose a modest 3.3%. In trend terms, which strip out monthly volatility in the figures, housing approvals have soared 14.4% over the year to June. However, the trend rate of dwelling approvals has now fallen for four consecutive months, at a time when the Reserve Bank of Australia is trying to support the economy with ultra-low interest rates.
Meanwhile, Reserve Bank of Australia Glenn Stevens said China's portfolio flows could reach $400 billion a year after freeing up its financial markets. The Governor urged Asia to develop its financial markets to absorb the potential inflow.
© Dukascopy Bank SA