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Australia Home-Loan Approvals Gain in September After Rate Cuts

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Nov. 12 (Bloomberg) -- Australian home-loan approvals rose in September for a second month as buyers responded to the central bank’s interest-rate cuts.

The number of loans granted to build or buy houses and apartments gained 0.9 percent from August, when they increased a revised 2.1 percent, the statistics bureau said in Sydney today. The median estimate in a Bloomberg News survey of 16 economists was for approvals to gain 1 percent.

Today’s data follow a government report last week showing Australian employers added more workers in October than economists forecast. The nation’s central bank has reduced the overnight cash rate target five times since Nov. 1, 2011, to help extend a 21-year run without a recession.

“Conditions are generally looking up in the housing market, as lower rates have improved home buyer appetite,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the report.

The Australian dollar was little changed, buying $1.0394 at 11:35 a.m. in Sydney compared with $1.0393 before the report.

House prices in Australia’s eight state capital cities jumped 1.4 percent in September, the biggest increase since March 2010, according to a report from RP Data Ltd. and Rismark International.

Today’s report showed the total value of loans rose 3.8 percent to A$21.2 billion ($22 billion) in September from a month earlier.

Investment Lending

The value of lending to owner-occupiers gained 1.5 percent, the report showed. The value of loans to investors who plan to rent or resell homes advanced 8.6 percent.

First-home buyers accounted for 19.3 percent of dwellings that were financed in September, up from 18.6 percent in August and the highest proportion since January, the report showed today.

Investors are pricing in a 62 percent chance Reserve Bank of Australia Governor Glenn Stevens will cut the benchmark rate 0.25 percentage point to 3 percent next month, swaps data compiled by Bloomberg show.

Australian employers hired 10,700 workers in October, compared with economists’ forecasts for an increase of 500, and the unemployment rate unexpectedly held as the nation weathered a global slowdown.

To contact the reporters on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net; 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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