SYDNEY - Weaker than expected housing finance data will not prevent the Reserve Bank of Australia (RBA) from raising the cash rate next month, an economist says.
Housing finance commitments for owner-occupied housing rose 1 per cent in August, seasonally adjusted, to 47,540, the Australian Bureau of Statistics said yesterday.
While the median market forecast was for a 1 per cent rise in the month, the composition of the data was mixed.
Construction of dwellings fell 1 per cent in the month, while purchases of new dwellings fell 2 per cent.
The only sign of strength in the data was purchase of established dwellings, which rose 1.4 per cent in the month.
"[It] adds nothing to the economy," said CommSec economist Savanth Sebastian.
"It's probably a bit of a concern that finance for construction of housing fell for the 10th straight month."
He said he was still pencilling in a rate rise from the RBA next month, because official inflation data released late this month is expected to show steady growth in prices in the September quarter.
The RBA adjusts the cash rate to keep inflation under control.
"They are very unlikely to lift in December because of Christmas sales," Sebastian said. "If they don't raise in November, February will mark nine months without a rate rise."
Total housing finance by value fell by 1.3 per cent in August to A$20.147 billion ($26.35 billion).
