The record-low interest rate in Australia contributed to a 1.8% increase in home loan approvals in May, the Australian Bureau of Statistics said earlier this month.
As many as 49,636 Australian consumers were granted mortgage approvals in May, up from 48,736 the previous month. The share of property loans provided to first-home buyers rose to 14.6% from 14.3% in April.
In money terms, housing finance advanced 2% month-on-month on a seasonally adjusted basis to $23.43 billion.
While the 1.8% uptick in mortgages was slightly lower than the 2.2% increase expected by industry experts, the lower interest rate has continued to play a critical role in the home loan market, particularly in New South Wales where demand has been dramatically low in the past eight years, ANZ head of property research Paul Braddicks said, as quoted by the Sunday Morning Herald.
Despite the higher forecast for the market, this is still a very strong figure and comes in sharp contrast to the developments observed in the broader economy last month, he added.
The home finance data is not likely to alter expectations of an additional rate cut in August, the paper noted.
The house finance market is definitely starting to show signs of recovery, Westpac senior economist Matthew Hassan told the paper.