New home sales have fallen to their lowest point since May 1994, according to the latest figures from the Housing Industry Association.
Sales fell 9.4% in March to just 5,443 homes, after a 3% increase during February.
“Leading housing indicators such as new home sales are pointing to on-going deterioration in already very weak new home building conditions,” chief economist Harley Dale said in a statement.
“That situation is in turn having a major negative impact on manufacturing and services sectors.”
Housing sales fell 9.7%, while unit sales fell by 6.9% across the country.
In New South Wales, home sales fell 9.7%, in Victoria they dropped 4.6%, while in Western Australia, new home sales fell by 12%. Queensland suffered the worst fall, with home sales falling 15.3%.
The data comes just a day before the Reserve Bank is expected to announce a cut in the official interest rate.
Shares in professional services group Spotless have risen nearly 5% this morning after it said it had entered into a scheme implementation agreement with Pacific Industrial Services.
That firm is indirectly owned by Private Equity Partners – and the intention is to acquire 100% of the company’s ordinary shares.
“Accordingly, the directors unanimously recommend that Spotless shareholders vote in favour of the scheme at the scheme meeting and intend to cause any Spotless shares in which they have a relevant interest to be voted in favour of the scheme, in the absence of a superior proposal and subject to an independent expert concluding that the scheme is in the best interests of Spotless shareholders,” Spotless said in a statement.
“Following extensive discussions with PEP, in particular over the past week, and a detailed assessment of PEP’s proposal, the Spotless board has determined that, under the present circumstances, the scheme is in the best interests of shareholders.”
The Australian sharemarket has opened higher this morning following a strong lead from Wall Street and the expectation of a rate cut tomorrow.
The benchmark S&P/ASX200 index was up 28.1 points or 0.6% to 4,390.2 at 12.00 AEST, while the Australian dollar fell slightly to $US1.04c.
In the United States, the Dow Jones Industrial Average rose 23.7 points or 0.2% to 13,228.3.
National Australia Bank will restructure its loss making business in the United Kingdom after it contributed to a 15.6 per cent fall in the group’s first half profit.
NAB’s UK business posted a 25 million pound ($39.22 million) loss for the six months to March 31, down from a 77 million pound profit in the previous corresponding period.
Increased funding costs and higher bad debts contributed to the loss, NAB said.
Chief executive Cameron Clyne said the UK business would be simplified to adapt to the weak economic conditions there and improve returns for NAB in the medium term.
The bank will cut around 1,400 staff from its UK operations as a result of the restructure, according to the Financial Times.
Amazon.com’s quarterly earnings figures trounced forecasts, with sales soaring in the first three months of the year.
Sales rose 34% to $US13.18 billion, while net income fell to $US130 million when compared to the same quarter last year.
Amazon’s stock price increased on the back of the sales figures.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
