Home loan approvals up again

Wednesday 11 March 2009

Article by Mozo

Approvals for new home loans continued to soar in January as thousands of first-home buyers jumped into the housing pool.

Official figures show that over the course of the month, home loan approvals soared to 56,000 on the back of interest rate cuts from the Reserve Bank of Australia.

Westpac senior economist Andrew Hanlan said that the rise could be attributed in large part to interest from first-home buyers.

"Lending to that segment has jumped sharply, up 60 per cent in the five months," he said.

"Finance approvals for the construction of new dwellings have also lifted sharply in the last couple of months."

Premier Kevin Rudd insisted that the first-home buyers grant had encouraged people to make the leap into the housing market.

In January, there was speculation that the Reserve Bank was going to hold an early meeting to take another swipe at interest rates as the new year got underway.

In the end, the Reserve Bank waited until February to take another 100 points off the base rate.

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