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Home loan rise shows impact of rate cuts

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AAP

2012-11-12

A rise in monthly home loan data shows Australians are beginning to take advantage of interest rate cuts.

The number of home loans approved in September rose 0.9 per cent to 46,395, up from an upwardly revised 45,983 in August, according to official data released on Monday.

Economists had expected housing finance commitments to rise 1.0 per cent in September.

Total housing finance by value rose 3.8 per cent in September, seasonally adjusted, to $21.203 billion, according to the Australian Bureau of Statistics (ABS).

CommSec chief economist Craig James said the data suggested home loan value could be on the rise.

"The data shows that loan value is rising at a faster rate than the actual number of loans," he said.

"That suggests that there's increased confidence by borrowers, or that home prices are edging a little higher."

The result could be an indication that consumers were beginning to feel the impact of rate cuts from the Reserve Bank of Australia (RBA) in previous months.

"There's a solid increase in the value of loans," Mr James said.

"It's what you would expect after a couple of rate cuts in the middle of the year.

The RBA cut the cash rate by half a percentage point in May, followed by a quarter of a percentage point each in June and October, bringing it to 3.25 per cent.