Rates hit Australian home-loan approvals
Number of mortgages granted unexpectedly drops 1pc in July, the most in five months
Australian home loan approvals unexpectedly fell in July by the most in five months as the highest interest rates among major developed economies discouraged buyers from entering the market.
The number of loans granted to build or buy houses and apartments declined 1 per cent from June, when they rose a revised 1 per cent.
This adds to evidence that the economy is weakening after government reports last week showed retail sales unexpectedly fell, employers unexpectedly cut 8,800 workers and the nation recorded its seventh straight monthly trade deficit.
Many economists expect Reserve Bank governor Glenn Stevens will resume lowering rates in November from 3.5 per cent after cuts in May and June.
"Potential buyers are reluctant to return to the property market despite looser monetary settings," said Katrina Ell, an economist at Moody's Analytics in Sydney. "Until there is a sustained improvement in sentiment, housing finance growth will keep disappointing."
The total value of loans fell 1.8 per cent to A$20.1 billion (HK$162 billion) in July.