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 percent from September, when they rose a revised 1.1 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 18 economists was for approvals to increase 3 percent.
Today’s data 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 Nov. 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 $1.0484 at 11:36 a.m. in Sydney after the report.
The total value of loans rose 1.8 percent to A$21.6 billion ($22.6 billion) in October.
The value of lending to owner-occupiers declined 0.2 percent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 5.5 percent.
First-home buyers accounted for 18.7 percent of dwellings that were financed in October, down from 19.4 percent in September and lower than 19.3 percent a year earlier, the report showed today.
RBA Governor Glenn Stevens and his board last week cut the benchmark rate to 3 percent, 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 in a Dec. 4 statement 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 Dec. 5 government report 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.
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