Australian consumer confidence jumped after the Reserve Bank cut interest rates for the first time in 31 months, and home-loan approvals rose in September, buttressing the case for quicker economic growth next year.
A Westpac Banking Corp. (WBC) and Melbourne Institute index of consumer sentiment climbed 6.3 percent to 103.4, the highest level since May, according to an Oct. 31-Nov. 6 poll released today of 1,200 consumers. The number of loans granted to build or buy houses and apartments jumped 2.2 percent from August, the sixth straight monthly gain, a government report showed.
Home-loan growth may accelerate after RBA Governor Glenn Stevens lowered the developed world’s highest benchmark rate on Nov. 1 to 4.5 percent from 4.75 percent amid reduced inflation pressure and a “subdued” housing market. A government report last week showed house prices dropped 1.2 percent in the three months through September, the third straight quarterly decline.
“The lending market was undergoing a marked recovery” before the rate cut, said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s biggest interdealer broker. “The fact that lending was recovering at a rapid pace through all of this global turmoil is a testament to how resilient the market actually is.”
Consumer sentiment climbed for a third straight month, the survey released earlier today showed. In August, it plunged to the lowest level in two years as turmoil engulfed global financial markets and threatened economic growth.
