"In answer to questions consumers are saying it's a good time to buy a dwelling, they're pretty modest at committing themselves to borrowing"
- Commonwealth Bank senior economist Michael Workman
Weak housing finance figures unveiled by the Australian Bureau of Statistics on Tuesday are confirming that consumers are still cautious about future income and showing unwillingness to take on new debt, preferring instead to pay down the existing ones. The number of home loans approved in April increased only 0.8%, well below market expectations of a 2% gain and down from a 4.8% rise in the prior month. In the meantime, total housing prices fell 0.2% in April; however, there was registered a 1.1% gain in investment housing.
Also Tuesday data showed that a measure of business mood in Australia remained unchanged at -1 in April. In the period from 1997 until 2013 business confidence average 5.86 and reached all-time high of 21.10 of 2002 and a record-low of -31.60 in January of 2009. Investors' mood remains under a zero level for the second consecutive month, suggesting worsening conditions within the country. Earlier this month the Reserve Bank of Australia, led by the Governor Glenn Stevens, decided to keep the overnight cash-rate target at 2.75%, as the central bank assesses the effect on the economy of a series of previous cuts. The RBA expressed its readiness to cut rate further, as the nation's exchange rate still remains high and the economic recovery is facing substantial risks.
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