Housing finance drops 1.8% in April, Shares steady: Economy Roundup

Housing finance continued to fall during April, with the Australian Bureau of Statistics recording a seasonally adjusted drop of 1.8%.

The figures come after some property experts have suggested that if building approvals and financing figures continue to fall, the industry could see prices decline in some areas.

The ABS reveals a total of 47,669 loans were made during the month, representing a 2.8% decrease from March in trend terms.

The total value of commitments rose by 0.8% to $21.7 billion. The value of loans for owner-occupied homes rose by 0.6% to $13.7 billion, while loans for investment housing rose by 1.3% to $7.9 billion.

Commitments for construction of new dwellings dropped by 4.8% to $5.5 billion, while the commitments for the purchase of new dwellings increased by 6.3% to $2.2 billion.

Meanwhile, German construction giant Bilfinger says it expects to raise about $1.39 billion from its float next month despite recent volatility on the ASX.

“I would be kidding you if I said nobody had any nervous moments about it… but the timing (of the float) is very close to the original schedule,” Valemus chairman Nick Greiner told reporters at a conference today.

“It is apparent that the Australian sharemarket is weaker, considerably weaker than what it was some months ago… That has obviously had an impact on the price range that is outlined in the offer.”

“So it would be delusionary not to accept that the state of the Australian sharemarket hasn’t had an impact. Of course it has.”

Shares open flat after Wall Street rises

The Australian sharemarket has opened flat today after a 1% increase on Wall Street overnight, with investors given a confidence boost from comments by a Federal Reserve board member regarding the health of the nation’s economy.

The benchmark S&P/ASX200 index was down three points or 0.07% to 4378.2 at 12.20 AEST, while the Australian dollar gained some ground to US82c.

ANZ shares gained 0.1% to $22.33, while Commonwealth Bank shares rose 0.6% to $51.04. Westpac lost 0.8% to $22.40 as NAB gained 0.7% to $24.28.

As reported by The Age, the Commonwealth Director of Public Prosecutions is reportedly reviewing allegations of bribery by two officials of a RBA subsidiary in order to determine whether a case can be made.

Radius Christanto has been accused of receiving $4.44 million to help Sucurency International produce banknotes for the Bank of Indonesia.

In the banking sector, NAB has reportedly made a series of hires during the past five weeks in order to increase its presence in Asia, a source has told Reuters.

The source reportedly said NAB would not follow along with the rapid expansion spearheaded by rival ANZ, which plans to earn 20% of profit from Asia by 2012.

“Australian and Asian trade and investment flows continue to grow and we want to make sure we are well positioned both with regards to our product offering and in terms of our geographical footprint to assist our clients,” a spokesperson said in a statement.

Meanwhile, Prime Minister Kevin Rudd will face over 1,000 miners today in Western Australia, all unhappy with the Government’s proposed resources super profits tax.

It is understood Fortescue Metals chief executive Andrew Forrest will join the demonstrators, along with a discussion with Rudd about the proposed 40% tax.

“We are not going to be diverted from our core objective, to get a good deal for the Australian people for the extraction of resources that can only be extracted and used once,” finance minister Lindsay Tanner told AAP.

“There are a range of things that we see as legitimate grounds for negotiations,” he added. “The negotiations are very important and we believe they are proceeding in a constructive and sensible manner but they are very complex.

“The government’s position is… the existing (resource tax) arrangements are both economically inefficient and they also deliver an inadequate return to the Australian people.”

Chicago fed president predicts long-term low rates

Overseas, investors in the United States have been boosted by some positive economic data. A survey from the Labor Department shows the number of job openings rose to 3.1 million from 2.8 million in March.

Additionally, Chicago Federal Reserve president Charles Evans said at a conference that interest rates are set to stay low for some time, and that the European debt crisis would not impact US recovery.

“We have a little bit more risk with the European situation; the (US) outlook looks good but not so strong as to reduce the unemployment rate very quickly; I don’t see inflationary pressures at the moment,” he said.

“So I think we will continue to have an accommodative policy stance for quite some time.”

Additionally, Fed chairman Ben Bernanke added he thought the US economy has enough momentum to avoid a “double-dip” recession.

Those remarks sparked optimism on Wall Street, where the Dow Jones Industrial Average gained 123.49 points or 1.26% to 9,939.98.