The FINANCIAL -- The number of home loans issued in April rose unexpectedly, driven by stronger demand for mortgages among both investors and prospective owner-occupiers, according to Nasdaq.
Lending to home buyers climbed by 1% from March, government data showed on June 9, supported by record-low interest rates that propelled a 2.6% rise in the value of loans to property investors.
It was the third month in a row that the number of home loans has risen.
Investor lending for housing is under the microscope of policy makers. The Treasury last week warned that a price " bubble" exists in Sydney, while Australia's banking regulator has moved to curb lending to investors, to whom about half of all mortgages are currently being sold.
Economists surveyed ahead of the announcement expected a 2.0% fall in the number of home loans issued.
While Sydney and Melbourne property is in hot demand, other capitals are seeing far weaker growth--especially places like Perth, which has been hit hard by a downturn in commodity prices and mining investment.
Record-low interest rates are helping to fan strength in the housing market, as well as in housing construction. The central bank has cut rates twice this year, in February and May, to help boost a weak economy.
Loans to build new houses rose by 4.3% in April from March, while approvals to buy newly built homes increased by 1.6% . Lending for longer-established residential property rose by 0.5%.