The number of loans granted to build or buy houses and apartments gained 1.3 percent from May, when they fell a revised 0.9 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 17 economists was for a 2 percent increase in approvals.
“Whilst home loans fell slightly short of expectations, there are signs of a pickup in housing activity,” said Celeste Tay, a Singapore-based economist at 4cast Ltd. The 75 basis points of cuts in the middle of the year that “took mortgage rates below average in May, for the first time this easing cycle, likely helped,” she said.
Today’s data, a stronger-than-forecast increase in retail sales and an unexpected gain in house prices add to the case for Reserve Bank of Australia Governor Glenn Stevens to extend a rate pause next month. The RBA cut the benchmark four times from November to June as weakness in Europe and China threatened the global outlook, before leaving borrowing costs unchanged at 3.5 percent at its past two meetings.
Today’s data showed the total value of loans rose 2.4 percent to A$20.7 billion ($21.8 billion) in June.
Loans to Investors
The value of lending to owner-occupiers gained 1.2 percent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 4.9 percent.
First-home buyers accounted for 18.3 percent of dwellings that were financed in June, up from 17.8 percent in May and higher than 16.4 percent a year earlier, the report showed today.
Recent reports have shown stronger consumer spending in Australia, fueled by A$2 billion in government carbon rebates and benefit checks paid out since May, as well as the rate cuts. Retail sales in June matched the biggest advance since April 2011.
Australian house prices unexpectedly rose in the three months through June, ending five straight quarters of declines, a government report showed Aug. 1. House and apartment prices in major cities climbed 0.6 percent in July from the prior month, when they rose 1 percent, according to the RP Data-Rismark home value index released on the same day.
Traders are pricing in a 45 percent chance the central bank will lower borrowing costs by a quarter percentage point to 3.25 percent next month, swaps data compiled by Bloomberg show. The local dollar traded at $1.0552 at 12:07 p.m. in Sydney, from $1.0554 yesterday in New York, when it touched a more-than-four- month high of $1.0604.
Powering growth is Australia’s biggest resource boom since a gold rush in the 1850s. The latest bonanza -- for iron ore, coal and natural gas -- is bringing investment projects the government estimates to be worth A$500 billion.
The nation’s jobless rate, at 5.2 percent in June, is lower than 8.3 percent in the U.S. and 11.2 percent in the euro area. The unemployment rate probably rose to 5.3 percent in July, according to the median estimate in a Bloomberg survey of 25 economists before a government report tomorrow.
To contact the editor responsible for this story: Stephanie Phang at firstname.lastname@example.org