The latest figures from the Australian Bureau of Statistics point to the continuing growth of the country’s property market, a trend highlighted by the seventh monthly increase scored in home loan approvals in July.
The report reveals that the number of home loans approved went up from 50,983 in June to 52,204 in July. This translates into a monthly growth of 2.4%, a rate that was well above market expectation for a more modest uptick of 2%. In money terms, home loans remained broadly unchanged on the month at $15.391 billion after exhibiting a 2.4% rise in June, while investment lending advanced 2.9% to $8.789 billion
Loans taken out for the purchase of new homes added 5.9% in July and loans for building residences slipped 2.1%, the statistics report also shows.
According to Ben Jarman, economist at JP Morgan, the increase in home loan approvals was chiefly fuelled by stronger demand from investors, who usually draw higher loans, noting that the average loan volume is on the decline.
Jarman believes that the main obstacle to unlocking further growth in the home market was the high cost of building, but expects that the “wind-down in the mining investment boom” would potentially ensure more resources for the sector and push prices down.
Meanwhile, CommSec chief economist Craig James is upbeat that the home market will keep picking up steam as consumers and businesses become more optimistic about the future. Days after Australians cast their votes in the federal election, they are expected to unleash spending, investing and hiring, he said.