Australia Home Loans Gain More Than Forecast on Jump in Investor Borrowing
Australian home-loan approvals
jumped in December by the most in seven months and exceeded
economists’ forecasts as buyers responded to central bank
interest-rate reductions.
The number of loans granted to build or buy houses and
apartments increased 2.3 percent to 48,453, the highest in
almost two years, from a revised November increase of 1.8
percent, the statistics bureau in Sydney today. The median
estimate in a Bloomberg News survey of 20 economists was for a
1.8 percent gain in approvals.
Reserve Bank of Australia Governor Glenn Stevens lowered
borrowing costs in November and December to 4.25 percent to
buttress the housing market, support employment and boost
confidence among consumers who are saving more. The RBA
unexpectedly held its benchmark last week as signs mount that
Europe is beginning to contain its sovereign-debt crisis and the
U.S. recovery is gaining strength.
“We’ve seen very strong loan growth,” said Adam Carr, a
senior economist in Sydney at ICAP Australia Ltd., a unit of the
world’s biggest interdealer broker. “Momentum is well above
average, and today’s data add weight to my view that the economy
is accelerating at a pretty decent clip.”
RBA Forecasts
The RBA, in its quarterly monetary policy statement
released last week, predicted average growth of 3.5 percent in
2012, down from its Nov. 4 estimate of 4 percent, though higher
than the 3 percent average in the decade through Sept. 30.
The Australian dollar was little changed after the report,
trading at $1.0699 at 12:20 p.m. in Sydney from $1.0705 before
the data.
Today’s data showed the total value of loans rose 3.8
percent to A$21.3 billion ($22.8 billion) in December, the
highest level in two years.
The value of lending to owner-occupiers gained 2 percent,
the report showed. The value of loans to investors who plan to
rent or resell homes jumped 7.5 percent.
First-home buyers accounted for 20.9 percent of dwellings
that were financed in December, up from 20 percent in November
and the highest level since January 2010.
First home buyers were spurred to enter market in New South
Wales, the nation’s most populous state, before its government
ended tax breaks Dec. 31 on purchases of existing homes.
Home-loan growth may slow after Westpac Banking Corp. and
Australia New Zealand Banking Group Ltd. boosted rates last
week independent of central bank policy.
Mortgage Rates
Westpac, Australia’s second-biggest lender, increased the
interest on a variable rate home loan by 10 basis points to 7.46
percent on Feb. 10, while ANZ Bank raised the cost 6 basis
points to 7.36 percent. Each cited higher debt premiums and
competition for deposits. Treasurer Wayne Swan condemned the
moves, encouraging customers to consider switching lenders.
The central bank said in a quarterly statement the same day
that retail spending remains subdued in Australia and the
property market was weak. “Turnover rates in the housing market
are ‘‘around the lowest they have been over the past two
decades,’’ it said.
A government report this month showed Australian house
prices plunged by the most on record in 2011 as global economic
uncertainty and concerns about its impact kept a lid on demand.
The index measuring the weighted average of prices for
established houses in eight major cities slid 4.8 percent from a
year earlier, the Feb. 1 report showed, the biggest calendar-
year drop since the data began in March 2002. They fell 1
percent in the three months to December from the previous
quarter, when they retreated a revised 1.9 percent.
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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Article source: http://www.bloomberg.com/news/2012-02-13/australia-home-loans-gain-more-than-forecast-on-jump-in-investor-borrowing.html
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