In Australia, the Bureau of Statistics announced that home building approvals fell in December by four times the amount that most economists had predicted. This happened after the central bank raised its key borrowing costs. With the raise come record highs not seen in the last 11 years.
Most economists believed that a fall was inevitable but saw only a 4 per cent likely drop. Instead, the actual number of permits granted here for building or renovations to apartments and homes dropped some 16 per cent over just November's numbers. Most investors believe that if construction in the residential markets does come down, then it may become evident that the Australia's economy may begin a cool down. The economy has been in an upswing of growth for the last 17 years.
Not helping maters is the sheer affordability of home loans, which is additionally causing uproar in Australia. This on the announcement that WESTPAC and National Australia Bank plan to raise their mortgage rates charged as high as 0.35 per cent. This raise is higher than the 0.25 per cent that is likely to be announced by the Reserve Bank here on Tuesday. The banks claim this rate hike, which will affect many homeowners here, is necessary to combat the costs faced due to the slumping global markets. Commonwealth Bank also raised rate above this and sooner than the announcement up 0.30 per cent. The federal government has condemned such moves.