December’s volume of mortgage approvals in Australia surpassed economists’ forecasts, as many home buyers rushed to acquire loans after the central bank slashed interest rates.
According to the statistics bureau in Sydney, the amount of mortgages granted to buy or build houses rose 2.3 percent to 48,453, from a revised 1.8 percent increase in November, the highest in almost two years.
Glenn Stevens, Governor of the Reserve Bank of Australia (RBA), cut borrowing costs to 4.25 percent in November and December to support employment, ease the housing market and boost consumer confidence.
The RBA surprised everyone when it maintained this low benchmark rate amidst indications that US recovery is gaining strength and the Eurozone debt crisis is being contained.
“We’ve seen very strong loan growth,” said Adam Carr, Senior Economist at ICAP Australia Ltd, a subsidiary 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.”
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