Home Loan Approvals in Australia drop 4%

Australia Home Loans Fall, Tempering Housing Recovery

Record-low interest rates have fueled a recovery in rate-sensitive sectors like housing, with auction clearances, house prices, and homebuilding permits all increasing in recent months. Home loans have also risen steadily up to now. Cementing recent signs that much of the housing market activity is being driven by investors, first-time homebuyers accounted for less than 14% of the market in August--the lowest percentage in nearly a decade. New lending to investors was flat on-month, but surged by almost 26% from a year earlier, the steepest gain since 2007.

Deutsche Bank also believes the rise is investor driven. New records were set in Sydney and Melbourne, fueled by eight rate cuts since end of 2011.