Media
Media
Australia's home-loan approvals fell almost twice as much as economists forecast in June as the highest interest rates in 12 years eroded demand for property.
The number of loans granted to build or buy homes and apartments dropped 3.7 percent from May, when they slumped a revised 6.9 percent, the statistics bureau said in Sydney. The median estimate of 20 economists surveyed by Bloomberg News was for a 2 percent decline.
Decreased lending adds to signs the $1 trillion economy is cooling and reinforces speculation the Reserve Bank of Australia may cut interest rates as soon as next month. Governor Glenn Stevens left his benchmark unchanged on Wednesday and signaled policy makers may lower borrowing costs for the first time in seven years as slower economic growth cools inflation.
Sentiment toward the housing sector has weakened significantly, Alex Joiner, an economist at Australia & New Zealand Banking Group Ltd in Melbourne, said ahead of the report. Still, a future interest-rate cut may begin to stem the rate of contraction in housing finance over coming months.
The Australian dollar traded at 91.68 US cents at 11:35 am in Sydney from 91.69 cents before the figures were released. The two-year government bond yield fell 4 basis points to 5.96 percent from Tuesday.
Governor Stevens left the central bank's overnight cash rate target unchanged at 7.25 percent on Tuesday for a fifth month and said it looks likely that "economic growth will be fairly slow over the period ahead".
With demand slowing, the board's view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing, Stevens said.
Commonwealth Bank of Australia Chief Executive Officer Ralph Norris, on July 24, said there are clear signs the economy is slowing as rising gasoline costs and interest rates damp spending. The bank is Australia's largest mortgage lender.
ANZ Bank last week forecast the biggest full-year profit drop since 1992 as bad loans swell.
Source: American Shipper
qq.com