The number of Australian home-loan approvals fell a seasonally adjusted 1.9% in December from November, the Bureau of Statistics said Tuesday.
Record low interest rates are fanning strong growth in housing, which is helping to cushion the economy against the end of a decade-long mining investment boom which is weighing on economic growth.
But at the same time, strength in house prices is unsettling economic policy makers as it brings with it the potential to destabilize the economy if it becomes too heated. Nationally, house prices are growing at 10% per year, with Sydney, the largest property market in the country, seeing house prices rise at around 15%.
The Reserve Bank of Australia last week left its benchmark cash rate at 2.50%, but signalled to markets further interest rate cuts are unlikely.
Finance approvals to build new houses rose 0.4% on-month in December. Approvals to buy new homes fell 1.9%, while lending for already built houses fell 2.2% in the month