(6 April 2011 – Australia) Official data from The Australian Bureau of Statistics has shown the number of home loans approved in February fell 5.6 percent to a seasonally adjusted 45,393, which was more than expected.Economists had centred forecasts of about a 1.5 percent fall in housing finance commitments for February; however it turned out to be the lowest number of home loans approved in a month since February 2001.
Westpac senior economist Andrew Hanlan said the figures suggested Queensland was yet to recover from recent severe weather events.
‘What we’re seeing is some continuing impact from the flood disruptions and also delayed reaction to the November interest rate rise,’ he said.
Meanwhile Macquarie Group associate economist Ben Dinte stated that there had been an expectation the number would fall on the back of the Queensland floods, but as seen with a closer look at the data, housing finance commitments fell across the board.
Mr Dinte said the fall in Queensland was relatively small compared to the other states and that the November interest rate hike by the Reserve Bank of Australia (RBA) was part of the reason for the fall.
He also said since households are facing higher interest rates there has been a softening in the market, which is expected to remain subdued.
‘The Reserve Bank doesn’t want to see housing market activity and consumer spending surging away any time too soon while the mining is still strong,’ he said.