The number of home loans in Australia for the month of January 2010 declined by 7.9 percent, the biggest drop since June 2000, as the market continues to move slowly following the phasing out of the First Home Buyers grant last year and increasing interest rates.
A report by the Australian Bureau of Statistics showed that the results for home loans in January follows the 5.5 percent fall in December, citing a seasonally adjusted figure. Many economists had been predicting a two percent increase for the first month of the year.
”While consumers are shrugging off interest rate hikes, rising borrowing costs are clearly hurting the housing market," said Matthew Circosta, Moody’s Analytics economist.
”This marks the fourth consecutive decline in housing finance since the Reserve Bank of Australia commenced tightening monetary policy, suggesting momentum in the property market is fading,” he added.
”Buyer enthusiasm may come under more pressure with more monetary tightening expected by the RBA, after surging job ads signal the economy will add more jobs and expand robustly in the first half of this year.”