A rise in monthly home loan data shows borrowers are beginning to take advantage of interest rate cuts.
Home loans grew 0.9 per cent in September, slightly lower than expectations, according to the Australian Bureau of Statistics. Economists had expected a rise of 1 per cent, following a rise of 1.8 per cent in August.
The data does not take into account the Reserve Bank’s rate cut in October.
Despite just missing expectations, the home loans data is the latest piece of positive news for the housing market, which has seen a slight increase in activity in recent weeks.
In Melbourne, the clearance rate rose to 64 per cent in October from 60 per cent, according to the Real Estate Institute of Victoria. In Sydney, they rose to 67.9 per cent from 61.7 per cent in the same time.
ANZ senior economist David Cannington said the data showed that home buyers were making a modest return to the market.
‘‘Recently a lot of housing market activity has been dominated by weak sentiment from home buyers and developers,’’ he said. ‘‘But at the same time, the softness in house prices has built up a bit of pent-up demand for housing activity.’’
Mr Cannington said the overall trend was still weak compared to the boom three years ago.
‘‘If you look at the level of housing finance in annualised terms, the value of housing finance is still well below where it was in the peak of 2009.’’
CommSec chief economist Craig James said the data suggested home loan value could be on the rise.
‘‘The data shows that loan value is rising at a faster rate than the actual number of loans,’’ he said. ‘‘That suggests that there’s increased confidence by borrowers, or that home prices are edging a little higher.’’
The result could be an indication that consumers were beginning to feel the impact of rate cuts from the Reserve Bank of Australia (RBA) in previous months.
‘‘There’s a solid increase in the value of loans,’’ Mr James said. ‘‘It’s what you would expect after a couple of rate cuts in the middle of the year.
The RBA cut the cash rate by half a percentage point in May, followed by a quarter of a percentage point each in June and October, bringing it to 3.25 per cent.
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