Australian February home-loan approvals decline for second month on floods

April 7, 2011 - 0:0

Australian home-loan approvals declined for a second month in February as floods and a cyclone disrupted the housing market on the nation’s east coast.

The number of loans granted to build or buy houses and apartments dropped 5.6 percent from January, when they fell a revised 6.3 percent, the statistics bureau said in Sydney on Wednesday. That compares with the median estimate for approvals to slip 2 percent in a Bloomberg News survey of 21 economists.
Reserve Bank of Australia Governor Glenn Stevens held the benchmark interest rate at 4.75 percent for a fourth meeting on Tuesday after seven increases from October 2009 to November last year. Tropical Cyclone Yasi in February tore through sugar- and banana-producing areas, following two months of rains in Queensland that killed 36 people, shut mines and wiped out crops, while the southern state of Victoria was also hit.
“Disruptions from the January floods and a delayed reaction to the November interest-rate rise were key negatives early in 2011,” Westpac Banking Corp. economists led by Bill Evans wrote in a report after the data. “This result reinforces the likelihood of the RBA remaining on hold for now.”
The Australian dollar was little changed following the report, trading at $1.0372 at 2:12 p.m. in Sydney from $1.0339 just before the release.
-----------State breakdown
A state breakdown showed New South Wales declined 10.1 percent and Victoria was down 4.6 percent, while Queensland failed to rebound from the 15.7 percent drop in January, falling 0.5 percent in February.
The statistics bureau said on Wednesday the “specific impact” of the floods couldn’t be quantified.
The total value of loans declined 4 percent to A$19.3 billion ($20 billion) in February, the report showed.
The value of lending to owner-occupiers dropped 4.8 percent, the report showed. The value of loans to investors who plan to rent or resell homes declined 2.3 percent.
First-time home buyers accounted for 14.9 percent of dwellings that were financed in February, down from 15.2 percent in January and lower than 18.6 percent a year earlier, the report showed on Wednesday.
Australian house prices unexpectedly rose in the three months through December, a government report showed in February.
An index measuring the weighted average of prices for established houses in eight major cities climbed 0.7 percent last quarter from the previous three months, the Australian Bureau of Statistics said Feb. 1. They gained 5.8 percent from a year earlier.
(Source: Bloomberg)