SYDNEY, Jan. 17 (Xinhua) -- The cheap price of cash via low interest rates, and strong price growth are keeping first home buyers out of the market in Australia, according to figures released Tuesday.
Home loan approvals rose 0.9 percent for the month of November, outperforming an expected 0.3 percent drop for the period.
While combined value of housing finance increased 2.2 percent, much of the rise is attributed to increased loans for housing investments, which rose 4.9 percent.
In a note, ANZ economists say that only 8.7 percent of all housing financial agreements were made by first home buyers, with the rate slowly dropping.
"Hampered by price increases, soft wages growth, and low interest rates affecting the return on savings; the number of first home buyers per month has actually fallen slightly over the past year," ANZ said.
Commonwealth Bank of Australia economist Kristina Clifton said these results would likely give the Reserve Bank of Australia (RBA) a reason to avoid cutting interest rates in 2017, with higher debt levels and sluggish income growth driving up the debt to income ratios for Australian households.
"The RBA has made it clear that this is of some concern and is a key reason why it is unlikely that we will see further rate cuts this year," Clifton said.
