A fall in applications and approvals for housing loans in August was unlikely to have an effect on [reducing] interest rates, economists said today.
Housing finance commitments for owner-occupied housing fell 1 per cent in August, seasonally adjusted, to 63,217, the Australian Bureau of Statistics said.
Total housing finance by value fell 1.3 per cent in August, seasonally adjusted, to $19.852 billion.
Housing finance by value for owner occupation fell 1.3 per cent, adjusted, to $13.956 billion.
Economists had been looking for a 1 per cent fall in the number of housing finance commitments for owner-occupiers.
Macquarie Bank senior economist Brian Redican said the data was in line with the Reserve Bank of Australia's (RBA) interest rate hike to 6.0 per cent in August.
"It's really not surprising given that the Reserve Bank was raising interest rates in August and that there were some more dire warnings about the housing market there," Mr Redican said.
"But this kind of decline after some healthy months won't pose any concerns for policy makers so I don't think it will have any influence on the current policy debate."
Commonwealth Bank senior economist Michael Workman said the modest fall indicated there was still some underlying strength in the housing market.
"If anything, this is still one of those things indicating that the economy still has a fair bit of momentum," Mr Workman said.
"And it's just one of those issues that would easily stack into this view there are no signs of weakness that could delay a rate rise."
Citigroup director and strategist Stephen Halmarick said the RBA would be pleased with the results, with the August rate hike appearing to have softened the market.
"I think the data so far from the August rate hike has shown there is a little bit of reduction in momentum in the household part of the economy, but it's not dramatic," he said.
However, he said new RBA governor Glenn Stevens would likely signal a continuing tightening bias in his speech tonight at the Australian Business Economists' annual forecasting conference.
"But that bias remains a patient one," he said.
He said the RBA would likely watch further developments before making another rate move.
He said Citigroup did not expect rates to rise again this year, although the tightening bias was expected to remain into next year.
Source: AAP
