Australians took out more home loans in May, taking advantage of the boost from government grants and record low interest rates.
The number of home loans, seasonally adjusted, increased 2.2 per cent in May after rising 0.9 per cent in April. The latest increase marks the eighth straight month of gains in the key reading on the health of the housing market.
''The policy stimulus from the Federal Government and the central bank has helped boost the housing market, offsetting the deterioration in the labour market conditions that would otherwise subdue the willingness of people to purchase houses,'' said economist Matt Robinson of Moody's Economy.com.
This is a 'prime example'' of monetary and fiscal policy working, he said.
A survey of economists expected the number of home loans to gain 1.3 per cent.
First-home owners, as a share of owner-occupied borrowers, increased to 29.5 per cent in May, from 28.6 per cent in April, according to the ABS, showing the continued demand kicked up by grants.
Loans for owner-occupied housing rose 2.3 per cent in the month, while loans for investment homes gained 2.4 per cent.
czappone@fairfax.com.au
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