Australia Home-Loan Approvals Rose 0.2% in April After Rate Cuts

Australian home-loan approvals rose in April for a second straight month, as buyers responded to the central bank’s back-to-back reductions in interest rates late last year.

The number of loans granted to build or buy houses and apartments gained 0.2 percent from March, when they rose a revised 0.8 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 17 economists was for no change in approvals.

The report, and others this week showing an unexpected increase in employment and faster-than-forecast growth, add to the case for Reserve Bank of Australia Governor Glenn Stevens to pause rate reductions at next month’s meeting. The RBA cut the benchmark by 75 basis points over the past two meetings to shore up the economy as weakness in Europe and China threaten the global outlook.

“Looser monetary settings are improving affordability and encouraging buyers back into the market, albeit in a limited capacity,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the release.

Today’s report showed the total value of loans rose 1.2 percent to A$20.5 billion ($20.2 billion) in April.

The value of lending to owner-occupiers gained 0.9 percent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 1.7 percent.

First-home buyers accounted for 16.8 percent of dwellings that were financed in April, up from 16.4 percent in March and lower than 17.1 percent a year earlier, the report showed today.

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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