The Australian Bureau of Statistics reported that home loans for owner-occupied housing went up by 1.9 percent to 49,307. This is the fourth straight month that home loans have grown and economists are positive that they will continue to increase. October’s growth follows September’s increase of 1.3 percent.
Economists were predicting a 0.3 percent increase in home loans but total finances for housing for October went up by 2.2 percent to $20.901 billion. These numbers reflect the status of the housing market before the Reserve Bank of Australia increased the official cash rate from 4.5 to 4.75 percent after six months of non- movement.
In the mean time, economists predict that the official cash rate will not move for a while but upward inflationary pressure due to a stronger economy can push up the cash rate again. The figures for October are decent but it does not factor the latest RBA cash rate increase yet and it is more interesting to see the figures for November.
Nonetheless, October’s figures are a little above expected though first home buyers only comprise of 15 percent of the total home loans and it impossible that this percentage will rise given that the First Home Buyers Grant has ended and interest rates have increased. Thus, it is expected that investors will take advantage of the market’s situation.
Figures for October were better than expected but the increase reflects stronger conditions in the labour market as well and the October figures is a positive sign before the cash rate increase kicked in.
