Australia home-loan approvals gain in September after rate cuts

Australia bucks trend to post much better employment figures as well as higher lending

PUBLISHED : Wednesday, 14 November, 2012, 12:00am
UPDATED : Wednesday, 14 November, 2012, 3:22am

Australian home-loan approvals rose in September for a second month as buyers responded to the central bank's interest-rate cuts.

The number of loans granted to build or buy houses and apartments gained 0.9 per cent from August, when they increased a revised 2.1 per cent, the statistics bureau said in Sydney. The median estimate in a Bloomberg News survey of 16 economists was for approvals to gain 1 per cent.

A government report last week showed Australian employers added more workers in October than economists forecast. The nation's central bank has reduced the overnight cash rate target five times since November 1, 2011, to help extend a 21-year run without a recession.

"Conditions are generally looking up in the housing market, as lower rates have improved homebuyer appetite," Katrina Ell, an economist at Moody's Analytics, said before the report.

The Australian dollar was little changed following the report.

House prices in Australia's eight state capital cities jumped 1.4 per cent in September, the biggest increase since March 2010, according to a report from RP Data and Rismark International.

The report showed the total value of loans rose 3.8 per cent to A$21.2 billion (HK$17.31 billion) in September from a month earlier.

The value of lending to owner-occupiers gained 1.5 per cent, the report showed. The value of loans to investors who planned to rent or resell homes advanced 8.6 per cent.

First-home buyers accounted for 19.3 per cent of dwellings that were financed in September, up from 18.6 per cent in August and the highest proportion since January.

Investors are pricing in a 62 per cent chance Reserve Bank of Australia Governor Glenn Stevens will cut the benchmark interest rate by a quarter of a percentage point, to 3 per cent, next month, swaps data compiled by Bloomberg show.

Australian employers hired 10,700 workers in October, compared with economists' forecasts for an increase of 500, and the unemployment rate unexpectedly held as the nation weathered a global slowdown.