“There are a considerable number of obstacles blocking the prospect of a strong up-cycle in new home building, including costly planning delays, the re-emergence of land and skilled labor shortages and rising interest rates,” said Housing Industry Association Chief Economist Harley Dale.

Sales of apartments fell 4.9 percent in November and detached home sales gained 0.8 percent, today’s report showed.

“The multi-unit sector continues to look extremely weak” amid an “on-going lack of available credit,” Dale said.

The Australian dollar traded at 91.41 U.S. cents at 11:11 a.m. in Sydney from 91.26 just before the report was released. The two-year government bond yield rose 1 basis point to 4.49 percent. A basis point is 0.01 percentage point.

Interest Rates

Stevens and his board increased Australia’s overnight cash rate target between October and last month to 3.75 percent from a half-century low of 3 percent amid rising business confidence and higher house prices.

Deputy Governor Ric Battellino said on Dec. 16 monetary policy is “now back in the normal range” after Australian banks raised home-loan rates by more than the central bank has increased its benchmark.

Westpac Banking Corp., Australia & New Zealand Banking Group Ltd. and Commonwealth Bank of Australia boosted their variable home-loan rates by an average of 89 basis points.

Investors are betting there is a 52 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 9:32 a.m.

A report published on Dec. 9 showed home-loan approvals fell 1.4 percent in October from September, when they gained a revised 3.3 percent.