(Updates with comment from economist in fourth paragraph.)
Oct. 4 (Bloomberg) -- Australian home-building approvals jumped in August, the second straight advance, as a nine-month pause on interest rates led to stronger demand for apartments and home renovations.
The number of permits granted to build or renovate houses and apartments rose 11.4 percent from July, when they gained a revised 1.8 percent, the Bureau of Statistics said in Sydney today. That compares with the median forecast for a 1 percent increase in a Bloomberg News survey of 21 economists.
Australia’s borrowing costs are the highest in the developed world as the Reserve Bank seeks to contain inflation during the nation’s biggest mining expansion in more than a century. Governor Glenn Stevens will keep interest rates unchanged at 4.75 percent for an 11th month today, a Bloomberg News survey of economists showed, to gauge the fallout from Europe’s sovereign-debt crisis and the U.S. fiscal problems.
“The volume of anecdotes of rising housing activity in both the home building and auction markets have markedly increased in the past month,” Roland Randall, an economist at TD Securities Inc. in Singapore, wrote before the report.
Building approvals in August dropped 5.5 percent from a year earlier, the report showed. That compares with economists’ forecast for a 15.1 percent drop year-over-year.
Approvals to build private houses fell 1 percent to 7,547 in August from the previous month, the report showed. Approvals for apartments and renovations advanced 35.1 percent to 5,829.
Australia’s higher borrowing costs relative to other developed- world economies and a mining-investment boom helped drive the Australian dollar to $1.1081 on July 27, the highest since exchange controls were scrapped in 1983. The currency is down about 14 percent since then, buying 95.16 cents just before today’s data were released.
The nation’s labor market has weakened this year, with monthly employment growth averaging 2,800 from January through August, less than a 10th of the average of 30,500 in the first eight months of 2010.
--With assistance from Daniel Petrie in Sydney. Editors: Brendan Murray, Edward Johnson
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