Mortgage approvals in Australia saw their biggest gain so far this year in June, as borrowers responded positively to the Reserve Bank of Australia’s (RBA) interest rate cut of 1.25 percentage points since November 2011.
According to the country’s statistics bureau, the number of mortgages approved to build or purchase homes rose 1.3 percent month-on-month in June, as opposed to May when it fell by 0.9 percent.
However, the uptick in June approvals is still lower than the median estimate of two percent based on a Bloomberg News survey of 17 economists.
“Whilst home loans fell slightly short of expectations, there are signs of a pickup in housing activity,” said Celeste Tay, Economist at 4cast Ltd. She added that the interest rate cut of 75 basis points in the middle of the year that “took mortgage rates below average in May, for the first time this easing cycle, likely helped”.
Moreover, first-time purchases accounted for 18.3 percent of the homes financed in June.
Related Stories:
UK mortgage market still sluggish
7% drop in US mortgage closing costs
Banks cannot approve home loans at showflats: MAS