Sunday, April 10, 2011 10:58 PM

Australian Home Sales Sink, Luxury Units Sell for Half Cost; New Home Loans at 10-Year Low; Australia Retailers in Deep Trouble; Party Officially Over

Things are not looking too hot down under. Not only is the Australia housing collapse picking up steam, but Australian retailers are struggling mightily in spite of rising sales numbers.

Bloomberg reports Australia Retail Sales, Loans Rose in February, Sending Dollar to Record http://www.bloomberg.com/news/2011-03-3 ... ecord.html

Australian retail sales rose in February and lending to businesses climbed for the first time in nine months, according to government reports that sent the nation’s currency to a record against the U.S. dollar.

Sales advanced 0.5 percent from a month earlier, when they gained 0.4 percent, the Bureau of Statistics said in Sydney today. That was the biggest increase since July and was higher than the median forecast in a Bloomberg News survey of 24 economists for a 0.4 percent increase.

A separate report from the Reserve Bank of Australia showed total credit extended by Australian lenders last month jumped by the most since May, led by business loans. The signs of stronger consumer spending and a lending revival boosted the local dollar as confidence grew that natural disasters didn’t derail the economy’s expansion.
That is the extent of the good news.

Housing is a veritable disaster. Even retail sales do not look so good from the perspective of retail profits.

Frugal is the New Black, Tourism Sinks, Retailers Struggle

The Australian reports Mining hides flatlining Australian economy http://www.theaustralian.com.au/nationa ... 6035658325

The growth in employment, which yesterday pushed the March jobless rate below 5 per cent, is concentrated in a handful of industries, several of which have little to do with the overall health of the economy.

The Australian Chamber of Commerce and Industry's latest survey of business confidence found that 34.5 per cent of businesses say trading conditions are poor, while the number expecting conditions to deteriorate over the next three months has almost doubled since the beginning of the year to 18.7 per cent.

"The non-mining sectors, which still make up 90 per cent of the economy, are exposed to pressure from interest rates, the dollar, cautious household spending and rising oil prices," ACCI economics director Greg Evans said.

Figures released this week revealed spooked consumers and a sluggish housing market had put even the booming mining state of Western Australia into a technical recession, with two consecutive quarters of economic contraction.

The latest figures from RP Data revealed house prices fell in every capital city except Sydney in February, with the strong growth experienced in the market in 2009 flattened in the past year by the run of interest rate rises.

Retail king Gerry Harvey, co-founder of the Harvey Norman electrical and furnishings chain, yesterday described a "multi-speed economy" in which only the mining, food and hardware sectors were flourishing.

"There's an awful lot of retailers just surviving, who have sacked all their staff and kept on mum, dad and the kids working 14 hours a day just to keep the doors open," Mr Harvey said. "You'll see a lot of retailers going in the next few months - they just can't survive - and the small ones are going under every day."

Australian National Retailers Association chief executive Margie Osmond said retail was "the sick man of the economy. "We've been severely bruised by interest rate activities, and we have a community completely conditioned now to discount-only. Frugal is the new black."

But Australian Tourism Export Council managing director Felicia Mariana notes that foreign visitors are less likely to stray beyond the big cities, starving regional towns of investment. "Further afield, you'll see hotel occupancy rates of 30, 40, 50 per cent," she said yesterday. "People are using the internet to build itineraries and they are less and less inclined to meander and drive four or five hours to find an interesting place."

The trend is most apparent in far north Queensland, where visitor numbers fell 9 per cent last year. Tourism spending fell 12 per cent - and the fall-off came even before Cyclone Yasi and floods ravaged the region.

Luxury Units Sell For 50% of Cost

The Fraser Coast Chronicle reports Luxury units go at basement prices http://www.frasercoastchronicle.com.au/ ... riverview/

AFTER more than 18 months on the market, the luxury Riverview On March apartments finally went under the hammer yesterday — and about 140 people came to watch as they sold for a song.

Valued at $650,000 to $700,000-plus each, four of the six units sold. They fetched $510,000, $320,000, $339,000 and $300,000.

Auctioneer Jason Andrew was made to earn his keep in cajoling every last dollar out of the buyers, but bidding was desultory for the two penthouses, which were eventually passed in because they did not meet the reserve price.

Developer Ron Blyth admitted he felt hard done by, with three of the four sold units going for less than half the building cost.

Even on the highest-selling apartment, Mr Blyth lost about $200,000 – or a total of about $1.2 million for the combined sales.

“It's less than encouraging,â€