A recent pick-up in Australian housing loan approvals has gone into reverse, suggesting a series of interest rate cuts is taking its time in percolating through the economy.
The latest seasonally adjusted figures from the Australian Bureau of Statistics, released yesterday, showed the number of home loans approved in December was down by 1.5 per cent from November.
It was the third monthly fall in a row.
In dollar terms, home loan approvals were down by 2.7 per cent while loans approved for investors dropped by 2.4 per cent, leaving the December total down by 2.6 per cent from November and up by only 0.2 per cent from a year earlier.
The value of loans approvals had risen strongly in September and October, led by a surge in investor loans which ebbed in November and December.
It is hard to ascribe the now-fading blip in loan approvals to any underlying economic trends.
More likely, it was driven by an increase in supply evident in an upsurge in approvals to build multi-unit residential projects through the middle months of 2012, after a lull from late 2011, which subsequently came on to the market either for immediate or "off-the-plan" sales.
Approvals for multi-unit dwellings are still elevated - the December level was 20 per cent above the average for the previous decade.
But approvals for free-standing houses, still the bulk of the new housing market, were 17 per cent below average, leaving total building approvals 4 per cent below par and showing no real sign of a new upsurge.
For the time being, the indications are that the series of interest rate cuts beginning in late 2011 has not gained as much traction as it seemed to have a few months ago.
That's consistent with the policy of the Reserve Bank of Australia to leave the door open for another interest rate cut or two if necessary to give the economy a boost.