An improving housing sector has been reflected in new Bureau of Statistics figures that show an increase in home loan approvals.
June home loan approvals in Australia hit 51,000 which is a jump of 2.7 per cent.
The figures come on top of this week’s interest rate cut by the RBA and faster than expected increases in house prices in Australian capital cities.
The figures suggest the continued cuts in interest rates are starting to bite into the housing market.
CommSec chief economist Craig James however pointed out that the value of new loans was still 4 per cent lower than it was 5 years ago.
“Borrowers remain cautious, especially first home buyers,” he said.
Mr James said low interest rates and government grants had led to an increase in the number of new homes being built.
“More loans being taken out will equate to more homes being bought and more homes being built,” he said.
“Housing is well placed to provide a boost to the economy and take over growth leadership from mining.”