Aireys Inlet Real Real Estate Open House Inspections October 22 -23

Home loans rise again: housing steadies

The housing sector is stabilising as talk of an interest rate rise wanes and Australians are encouraged to borrow more, economists say.

The number of home loans approved in August rose 1.2 per cent to 50,965, official figures show. Economists’ forecasts had centred on a 1 per cent rise in housing finance commitments for the month.

August was the fifth straight month that housing finance commitments had risen.

The Australian Bureau of Statistics said total housing finance by value rose 1.0 per cent in August, seasonally adjusted, to $20.848 billion.

JPMorgan economist Ben Jarman said the figures showed the housing sector was stabilising rather than rebounding.

‘‘It certainly means it’s not falling into a hole,’’ Mr Jarman said. ‘‘In the last few months worth of data, the housing finance figures have benefited from the perception that the RBA won’t be doing much in the near term.

‘‘So, if you went back to the start of this year, the RBA didn’t hike rates but there was all the forecast and all the language were making noises that you would get a couple of hikes this year.

‘‘Those aren’t being delivered and things offshore have turned a little bit sour.

‘‘What you’ve seen in the last few months in the home loans data is these fading expectations are helping out and people are coming back and they are happy to take on new debt.

‘‘We’re kind of calling this a mini-rally, but don’t think that this is the start of a tear away in the housing market.

‘‘There’s still a lot of uncertainty globally and that’s what’s keeping the RBA on the sidelines.’’

Mr Jarman said JPMorgan still expected the RBA not to change the cash rate from its current 4.75 per cent until at least the middle of 2012.

Check details on this weekends surf here.

See you in Our Backyard.