The rise in Australian home finance approvals revealed by the Australian Bureau of Statistics (ABS) is a positive sign for the housing market and needs to be maintained, according to Master Builders Australia (MBA).
Chief economist Peter Jones said the ABS figures indicate consumer demand for new dwellings is beginning to pick up following the two rate cuts from Australia's central bank at the end of last year.
"Finance commitments remain weak by historical standards but the housing market is beginning to pick itself off the floor," added Mr Jones.
He explained that first-home buyers are starting to respond to a decrease in property prices and lower interest rates.
Nevertheless the Reserve Bank can still do more to boost consumer confidence and stimulate the market, suggested the economist.
The Housing Industry Association recently criticised the ANZ bank's decision to increase its interest rates independently of the Reserve Bank, warning that lack of centralised authority could scupper Australian monetary policy.
Posted by Steve Douglas
