Housing prices up 1.9%, retail sales increase, Wall Street falls after consumer confidence declines: Economy Roundup

Housing prices have risen to their highest point during August since 2005, according to the latest figures from the RP Data-Rismark monthly index.

The index, which began four years ago, shows that housing prices increased by 1.9% during August, with the cumulative growth of the past eight months reaching 7.9%.

“Underpinned by the strongest population growth since 1971, record housing shortages… historically low mortgage rates, favourable employment outcomes, and one of the world’s most profitable banking systems, Australian home values have now extended 3.8% past their last February 2008 peak,” Rismark International managing director Christopher Joye said in a statement.

Housing prices in Melbourne and Sydney recorded the biggest growth, with gains of 11.6% and 8.6% respectively, with Darwin following with a growth rate of 9.7%.

Canberra followed with growth of 6.7%, trailed by Brisbane at 5.2%, Perth at 4.1% and Adelaide at 3.1%. Joye also said the figures relieved fears of a housing bubble, as the cheapest suburbs “underperformed” compared to the luxury end of the sector.

Meanwhile, new figures from the Australian Bureau of Statistics show retail sales grew by a higher-than-expected seasonally adjusted figure of 0.9% during August, following a 0.9% decline in July and a 0.8% decline in June.

Queensland and Tasmania recorded the biggest increases, with each state seeing a 1.4% increase in sales. South Australian sales increased by 1.1%, with New South Wales sales increasing by 0.8%.

Government confirms Australian injuries after Samoan tsunami

Overseas, the Government has said several Australians have been injured after an earthquake and subsequent tsunami hit the South Pacific nation of Samoa.
“The early reports don’t suggest that any of them are in very serious conditions, but they are in hospital,” parliamentary secretary for international development assistance Bob McMullan said on Sky News.

The Australian sharemarket has opened flat today after stocks dropped on Wall Street, where investors were pessimistic after a report that showed a drop in US consumer confidence.

The benchmark S&P/ASX200 index was down 6.7 points or 0.14% to 4746.4 at 12.00 AEST. The Australian dollar also remained steady at US87c.

ANZ shares lost 0.5% to $24.61, while Commonwealth Bank shares declined 0.2% to $51.99. NAB lost 0.2% to $31.17 as Westpac fell 0.8% to $26.21.

ASX warns over new trading licenses

The Australian Securities Exchange has said the Government should consider how new trading licenses will impact the liquidity of the market. Chairman David Gonski said at the regulator’s annual general meeting that the Government should learn from the experiences of markets in Europe.

“Errors in public policy decision-making in this area can have serious consequences for everyone in the financial community,” he said.

“We hope that the Government will take the time to learn the lessons stemming from aspects of the less than satisfactory multi-market outcomes in the US and Europe.”

Meanwhile, Elders has said it has completed its debt refinancing in an agreement with its banks and US note holders. The refinancing comes after the company said earlier this month it would raise up to $550 million through issuing discounted shares.

“I am very pleased that the company has reached formal agreement with its financiers,” Elders chief executive Malcolm Jackman said in a statement.

“The completion of the debt refinancing, combined with the equity recapitalisation that will follow a successful shareholder vote next month, will remove the uncertainty which has weighed on the business over the last 12 months, and secure the future of the company.”

In the US, Wall Street stocks fell after new private data showed consumer confidence fell in September. The Dow Jones Industrial Average fell 47.16 points, or 0.48%, to 9,742.20.