Helped by its massive natural resources, Australia has weathered the global financial crisis better than other Group of 20 economies. In 2012, its economy grew 3.1 per cent, compared with 1.6 per cent in the United States and 1.1 per cent in Canada.
Australia home-loan approvals rose less than expected in October
Australian home-loan approvals rose less than economists forecast in October even after central bank interest-rate reductions aimed at stimulating the economy and boosting the housing market.
The number of loans granted to build or buy houses and apartments advanced 0.1 per cent from September, when they rose a revised 1.1 per cent, the statistics bureau said. The median estimate in a Bloomberg News survey of 18 economists was for approvals to increase 3 per cent.
The figures follow government reports in the past two weeks showing economic growth slowed last quarter and mining companies lowered forecast investment for this fiscal year. The Reserve Bank of Australia has reduced the overnight cash rate target six times since November 1, 2011, to try to revive the housing market to help extend a 21-year run without a recession.
“The result is a continuation of the cautiousness in the household sector as consumers pay down debt, preventing a strong rebound in housing finance,” Matthew Circosta, an economist at Moody’s Analytics in Sydney, said before the release.
The Australian dollar was little changed at US$1.0484 at 11:36 a.m. in Sydney after the report.
The total value of loans rose 1.8 per cent to A$21.6 billion ($22.6 billion) in October.
The value of lending to owner-occupiers declined 0.2 per cent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 5.5 per cent.
First-home buyers accounted for 18.7 per cent of dwellings that were financed in October, down from 19.4 per cent in September and lower than 19.3 per cent a year earlier, the report showed.
RBA Governor Glenn Stevens and his board last week cut the benchmark rate to 3 per cent, matching the half-century low set during the 2009 global recession. Policy makers are aiming to rebalance the two-speed economy, where mining regions in the north and west thrive and manufacturers, builders and retailers in the south and east struggle.
“Recent data confirm that the peak in resource investment is approaching,” Stevens said last week, announcing the rate decision. “As it does, there will be more scope for some other areas of demand to strengthen.”
The RBA has lowered borrowing costs in six moves: 25 basis points apiece in November and December 2011, then 50 basis points in May, 25 in June, 25 in October and 25 this month. Still, the number of Australian construction jobs fell by 70,200 to 978,000 in the 12 months through August. Mining employment gained by 44,600 over the same period to 271,000, government figures show.
A report last week showed Australia’s economy slowed last quarter on the weakest consumer demand in 2 1/2 years and tighter government spending. A day earlier, data showed home-building approvals declined more than economists forecast in October, led by a slump in apartment projects.