November 2012: Falls in Housing Loans
Housing finance data from November 2012 indicates that despite reductions to the cash rate made by the Reserve Bank of Australia, interest rate cuts have done little to positively stimulate property market activity.
The Australian Bureau of Statistics said that there had been a 0.5 % fall in the number of home loan approvals, with just 46,199 approvals being made in November 2012. This figure was significantly below market expectations that an improvement of 0.5 would be seen.
The number of loans to buy new properties and loans to build new homes both fell, while the number of loans approved for the purchase of existing houses increased by 0.3 %, according to ABS figures.
Tom Kennedy, JP Morgan Economist, said that households were behaving cautiously and continuing to pay off debt rather than seeking new loans and credit. He said that the interest rate cuts made by the RBA had so far been unsuccessful in boosting the property market. “The broad-based weakness is going to continue for a little while longer until the structural changes that are occurring in the economy continue to play out,” he said.