Australian home-loan approvals rose in October for a seventh straight month before central bank Governor Glenn Stevens lowered borrowing costs for the first time in 31 months.
The number of loans granted to build or buy houses and apartments gained 0.7 percent from September, when they advanced a revised 1.9 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 17 economists was for approvals to be unchanged.
Home-loan growth may accelerate after Stevens cut interest rates last week for the second time in as many months, reflecting reduced inflation pressure and “subdued” credit growth. Buyers are also entering the market in New South Wales, the nation’s most populous state, before the government there ends tax breaks Dec. 31 on purchases of existing homes.
“Housing finance is being boosted by NSW first-time homebuyers wanting to purchase property before the stamp duty exemption ends,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the report. “The rate cuts will boost housing finance into 2012.”
Today’s report showed the total value of loans fell 2.5 percent to A$20.5 billion ($20.9 billion) in October.
The value of lending to owner-occupiers declined 1.2 percent, the report showed. The value of loans to investors who plan to rent or resell homes dropped 5.5 percent.
First-home buyers accounted for 17.9 percent of dwellings that were financed in October, up from 16.4 percent in September and higher than 15.4 percent a year earlier, the report showed today.
The nation’s four biggest banks -- Commonwealth Bank of Australia, Australia & New Zealand Banking Group Ltd., Westpac Banking Corp. and National Australia Bank Ltd. -- reduced home-loan rates for customers after both Reserve Bank moves.
Stevens lowered the overnight cash rate target to 4.25 percent from 4.5 percent on Dec. 6, citing “considerable turbulence” in financial markets and an increased chance of a “further material slowing in global growth.”
Traders are betting Stevens will lower borrowing costs again at the central bank’s next meeting in February, interbank cash-rate futures showed before today’s report.