Rate rise causes decline in finance for housing in Australia

16:09, May 17, 2010      

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Rising interest rates appear to have discouraged Australians from seeking housing finance, new figures showed on Monday.

Data published by the Australian Bureau of Statistics on Monday showed there had been a seasonally adjusted 3.4 percent fall in the value of finance for owner-occupied dwellings.

The figures showed finance commitments for owner-occupied housing fell from 14 billion dollars (12.25 billion U.S. dollars) in February to 13.5 billion dollars (11.8 billion U.S. dollars) in March.

The total value of personal finance also declined, falling by 1. 3 percent in March compared to the previous month.

However, demand for finance from the business sector increased, rising slightly by 1.1 percent to 28.3 billion dollars (24.77 billion U.S. dollars) from 28.1 billion dollars (24.6 billion U.S. dollars) in February.

Lease finance also rose, jumping 5.8 percent to 388 million dollars (339.8 million U.S. dollars) in March.

Earlier this month, the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.5 percent.

It was the third consecutive monthly increase and the sixth hike since October.



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