Home loan demand in Australia was defied by the “super-sized” interest rate increase set by banks in November, but pundits said the unexpected resilience of borrowers will not prevent the Reserve Bank of Australia (RBA) from imposing another increase next month.
Home loan offers rose 2.5 percent in November, the biggest monthly increase in half a year. This was fuelled by an increase in loan approvals to purchase new homes, which rose 9.7 percent in the month, while finances to build new homes climbed 2.7 percent and finances to buy resale properties grew two percent.
Annette Beacher, TD Securities head of Asia-Pacific research, said she was "very surprised" by the level of increases, adding that it “does somewhat defy logic” from the “double-barrelled” rate increase, where major banks in the country raised interest rates far above the RBA’s official increases.
She said the statistics suggested that rate policy was “not quite as restrictive as what you think.”
Ben Jarman, an economist at JP Morgan, was also surprised by the figures, but said that there were no further rate increases “on the immediate horizon”, due to the flooding in Queensland.
According to data released by the Australian Bureau of Statistics, the number of mortgages offered to first time buyers rose 15.6 percent from the current 15.4 percent. Fixed-rate loan offers stood at 8.1 percent of the total approvals, the highest level since June 2009.