The housing market appears to be recovering with a 4.4 per cent increase in home loans in May, following the sluggish movement earlier in the year as a result of the rate increase in November.
The number of approved home loans in May went up 4.4 per cent to a seasonally adjusted 49,437, according to official data. Economists had predicted a 4.5 per cent increase in housing finance commitments for the month.
The total housing finance by value increased by 2.9 per cent in May, which would amount to a seasonally adjusted $20.497 billion.
Many hope that the figure in May show some positive improvement after a depressing decline in the early months of 2011, with the numbers suggesting that investors were returning to the market after months of inactivity earlier in the year.
Bank lending was at its highest in about two years, implying that recovery from the global financial crisis is imminent.
Recovery was also seen at refinancing with competition between banks making it attractive for mortgage holders to refinance.
The second consecutive month showing improvement lends support to the belief that the economy is on its way to recovery, following the slowdown in the first quarter.
The consensus view was that the soft patch in economic growth was more fundamental than structural but many now feel that these figures are evidence to the contrary.
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