Demand for new home loans increased at a lower rate than expected in February, the month the Reserve Bank of Australia announced the reduced cash rate of 2.25%.
Data from the Australian Bureau of Statistics (ABS) revealed a 1.2% increase in the number of home loans granted (in seasonally adjusted terms) to 53,614 for February. It was a figure surprising for some economists after a Bloomberg survey anticipated the number of housing finance commitments to rise by 3% in the month.
Moreover, ABS said the total housing finance by value dropped 1% in the same month (seasonally adjusted, to $30.399bn) while the value of investor lending slipped 3.4% to $12.054bn.
However, refinancing activity showed an opposite scenario with a 4.5% rise.
The Business Spectator
reported that the ABS’s latest figures also showed first home buyers’ share of new loans issued in the month rose to 13.7% in February from 13.6% in January.
"The bank is working with other regulators to assess and contain risks that may arise from the housing market," RBA governor Glenn Stevens earlier said.
"In other asset markets, prices for equities and commercial property have risen, in part as a result of declining long-term interest rates."
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