/www.bloomberg.com/
By Victoria Batchelor
Sydney, Dec. 2 (Bloomberg) -- Australian building approvals probably declined in October following a record slump the previous month, signaling a housing construction boom that has fueled annual economic growth of around 4 percent is slowing.
Approvals to build new houses, apartments and undertake renovations probably fell 1 percent in October, according to the median forecast of 19 economists surveyed by Bloomberg News. Approvals slumped a record 19.4 percent in September.
The Australian Bureau of Statistics releases its building report at 11:30 a.m. Sydney time on Tuesday. Residential construction, which has been fueled this year by home loan rates at 30-year lows and a government handout to people building their first home, will not be a big contributor to growth in 2003, economists said.
``Unlike the past year, we will not have a voracious housing boom to support the economy'' over the coming year, said Tom Kenny, chief economist at Nomura Australia Ltd.
A report this week is expected to show the economy grew 0.9 percent in the third quarter from the previous three months and 3.4 percent from a year earlier, according to a Bloomberg News survey.
With the housing boom slowing, exports faltering because of a global economic slowdown and a drought cutting farm production, the central bank is expected to keep interest rates unchanged this week for a sixth month.
The Reserve Bank of Australia raised its overnight cash target rate to 4.75 percent in two quarter percentage point increases in May and June before leaving rates unchanged since.
``We expect rates to remain on hold for the foreseeable future,'' Kenny said.
A Bloomberg News survey of 22 economists show 16 expect the key rate to be kept at 4.75 percent until at least June 2003, two are forecasting rate cuts and four are forecasting an increases by June.