(Updates with comment from economist in fourth paragraph.)
Nov. 9 (Bloomberg) -- Australian home-loan approvals rose more than economists forecast in September, the sixth straight monthly gain, as more first-time buyers entered the market.
The number of loans granted to build or buy houses and apartments jumped 2.2 percent from August, when they rose 1.2 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 19 economists was for a 1.5 percent advance.
Home-loan growth may accelerate in coming months after Reserve Bank Governor Glenn Stevens cut interest rates last week for the first time in 2 1/2 years, reflecting reduced inflation pressure and Australia’s “subdued” housing market. A Nov. 1 government report showed house prices dropped last quarter, the third straight decline.
The data reflected “the increasing likelihood of rate cuts and positive trend monthly growth in housing finance since April,” David Cannington, an economist at Australia & New Zealand Banking Group Ltd., wrote in a research report before today’s release. Last week’s “mortgage-rate cuts and improving housing affordability should support moderate housing finance growth for the next three to six months,” he said.
The nation’s four biggest banks -- Commonwealth Bank of Australia, ANZ, Westpac Banking Corp. and National Australia Bank Ltd. -- reduced home-loan rates for customers after the RBA’s move. Westpac said its lower borrowing costs would save customers A$41 ($43) monthly on a A$250,000 mortgage.
Interbank cash rate futures show at least an 86 percent chance Stevens will cut the overnight cash rate target by another quarter percentage point at the next meeting in December. Stevens lowered the rate to 4.5 percent from 4.75 percent on Nov. 1, the first reduction since April 2009.
Today’s report showed the total value of loans rose 1 percent to A$21.1 billion in September.
The value of lending to owner-occupiers gained 0.7 percent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 1.9 percent.
First-home buyers accounted for 16.4 percent of dwellings that were financed in September, the largest proportion since May 2010 and up from 15.4 percent in August, the report showed today.
The RBA said in a quarterly statement on Nov. 4 that set out its economic growth and inflation forecasts that Australia’s housing market “remains weak.”
“The stock of unsold homes has not declined significantly and housing construction activity continues to be at very low levels,” the central bank said in the statement on monetary policy. “Population growth is, however, gradually reducing the underlying surplus of houses and there are some signs that house prices have stabilized, particularly in those areas that were less affected by overbuilding in the mid-2000s.”
An index measuring the weighted average of prices for established houses in Australia’s eight major cities dropped 1.2 percent last quarter from the previous three months, when it fell a revised 0.5 percent, a government report showed Nov. 1. Prices fell in each of the cities surveyed.
--With assistance from Daniel Petrie in Sydney. Editors: Brendan Murray, Victoria Batchelor
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