(12 March 2008 – Australia) Home loan approvals in Australia rose in January despite recent interest rate rises, the ABS has indicated.The increase in home loan approvals came on the back of the significant slump in the stock market. This has driven investors into property over stocks, even with ten prior interest rate rises since 2002.
The further two interest rate rises in February and March this year, which has left Australia with 12 straight increases, may dampen enthusiasm for the property market.
Explanations for the result include both a movement to fixed rate loans with the anticipation of more rate rises as well as a rush from those locking in new loans before rates were increased.
Loans to build or buy homes or apartments climbed 2.3 percent from December while loans for investors gained a substantial 8.3 percent in January, which is the biggest gain in seven months.