US home improvement chain Lowe's (LOW) partnered with Australia's largest retailer, Woolworths Limited, to develop a network of stores in the land down under. "The Australian love of property and high levels of home ownership mean that maintaining and improving homes is an important part of everyday life," said Michael Luscombe, Woolworths' chief executive, in a joint release. Under the agreement, Lowe's will take one-third ownership of the destination home improvement chain, which is slated to open its first store in fiscal year 2011. They plan to develop more than 150 store sites during the next five years. "This is a tremendous opportunity to enter the A$24bn (US$20bn) and growing home improvement market in Australia, at a time when the sector is underserved," said Robert Niblock, Lowe's chairman and CEO. Despite opportunity in Australia's home improvement market, the overall services sector showed some volatility in July, according to Commonwealth Bank of Australia's July Performance of Services Index (PSI) report. A June spike in the services sector was not sustained in July. Property services and new orders declined in the month, Commonwealth said in the report, which can be downloaded here and which features information from The Australian Industry Group and Markit Group. The Australian market may be experiencing a slower services sector, but its financial sector remains solid, particularly in the residential mortgage-backed securities (RMBS) space. Ratings downgrades among Australian prime and non-conforming RMBS remain unlikely as collateral performs within expectations, according to a July report from Moody’s Investors Service. The relative stability of performance among Australian RMBS may have something to do with the credit quality of the underlying collateral. Write to Diana Golobay.