June 09, 2011 – Data from the Australian Bureau of Statistics (ABS) show that the number of home loans approved in April has doubled than what the market has expected; the highest rise in more than two years.
Approvals for loans intended for new houses for sale have increased so potential houses for sale in Australia buyers are now beginning to do business again in the property market.
Queensland has showed signs of recovery after the recent summer flooding.
A rise of 4.8 per cent to a seasonally adjusted 47,347 was seen in the official data of the number of home loans approved in the month over the economists’ forecasts of 2.3 per cent rise in housing finance commitments for the month.
Likewise, a rise of 3.8 percent in April, seasonally adjusted to $19.848 billion, was seen in the total housing finance by value, according to the Australian Bureau of Statistics (ABS).
The highest figures in homes for sale loan approvals were seen in the ACT at a seasonally adjusted 8.8 percent, followed by Queensland by 6.2 percent, Western Australia at 4.1 percent, Victoria at 4.1 percent, NSW at 2.7 percent, and Tasmania at 2.3 per cent.
Ben Jarman, a JP Morgan economist, commented that the figures were much stronger than he had anticipated, showing the bouncing back of loan approvals in Queensland following the severe weather-related disruptions earlier in the year.
The soaring figure is said to be caused by the stabilization of the property market, rather than by its total turnaround.
Citi economist Paul Brennan said that both building approvals and housing finance are more consistent with a flat near term outlook for housing activity at around mid-cycle levels.
Mr. Jarman also said that the recent figures is not certainly an indicator of the start of a meaningful recovery in the housing market for he expects that the property market would remain quite soft throughout this year.
The RBA decided during their June board meeting to keep the cash rate unchanged at 4.75 per cent, where it has been since November 2010.
The further improvements in the housing market are likely to prompt the Reserve Bank to lift interest rates higher.
