Mortgage rate stimulus for housing market easing
The Reserve Bank's experimental series counting mortgage approvals seems to be providing early evidence this is now happening (the series counts about 94% of all mortgage approvals).
The series reached its nadir in June last year when the number of approvals was running at more than 25% below the previous year and then showed a steadily improving trend through to mid-June this year.
For example, in the 13 weeks ended June 12, approvals were 13.3% higher than in the same 13 weeks a year earlier. The 7,809 approvals in the week ended June 12 compared with the 5,540 approvals in the week ended June 6, 2008.
But since mid-June the series seems to be trending down again. Approvals in the 13 weeks ended July 3 were up only 6.2% from the same 13 weeks a year earlier and the 7,078 approvals in the week ended July 3 was down considerably from the 7,809 in the week ended June 12.
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