There are further signs Australia’s housing boom could be cooling, with demand for home loans and applications to build homes falling. Australian Bureau of Statistics data shows the value of new home loans fell 1.6% in June to $32.1bn. For owner-occupiers, loans fell by 2.5% to $22.9bn. “While this was the largest fall since May 2020, owner-occupier commitments remained 76% higher compared to a year ago and 64% higher than pre-Covid levels in February 2020,” the ABS head of finance and wealth, Katherine Keenan, said. The number of home building approvals also fell 6.7% to 18,911 in June, including an 11.8% tumble in private sector houses to 12,037. This was the third consecutive monthly decline reflecting the unwinding of pandemic stimulus measures, such as homebuilder, the ABS said. It comes as the Reserve Bank of Australia said on Tuesday that the economic outlook for the coming months was uncertain – and it kept its interest rate policies unchanged at its monthly board meeting. That included keeping the cash rate at a record low 0.10%. “The economic recovery in Australia has been stronger than was earlier expected,” the reserve bank governor, Phillip Lowe, said in a statement. “The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter.” Sign up to receive an email with the top stories from Guardian Australia every morning Lowe said the experience to date had been that once virus outbreaks were contained, the economy bounced back quickly. Economic circumstances have changed markedly since the RBA board last gathered in early July. Back then, Lowe was talking about a “positive path” for the economy after recovering from last year’s recession stronger than expected. But four weeks on, the outlook has darkened, with economists now predicting a sharp economic contraction in the September quarter. This is largely the result of the lengthy coronavirus lockdown in greater Sydney and regional NSW areas. Last month’s lockdowns in Victoria and South Australia will have also left a negative mark, as will current restrictions in Queensland. Over half of the experts included in the latest Finder RBA cash rate survey said lockdowns would slow property price growth across the country. Michael Yardney of Metropole Property Strategists said: “If lockdowns are extensive our property market will go into hibernation for a while and then come out stronger than ever, just like they did last year.” The reserve bank board on Tuesday decided to stick to its plan to reduce its bond buying program to $4bn a week from early September from $5bn currently. Economists had speculated the RBA would delay a reduction in the program – which aims to keep market interest rates and borrowing costs low – because of the expected deterioration in the economic outlook.
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