New mortgages to Australian landlords dropped the most in three years in February, signalling an easing in the speculator demand for housing that had concerned the Reserve Bank of Australia.
The value of new investor mortgages dropped 3.4 per cent in February from a month earlier, the sharpest fall since January 2012, government statistics showed. The measure increased 9.9 per cent on a yearly basis, the slowest pace since December 2012.
Slowing demand from investors may give the central bank greater flexibility to cut interest rates later in the year as tumbling commodity prices hurt the economy. The Reserve Bank reiterated last month its concerns that speculative demand for housing could "amplify" house price moves and increase the risk of significant falls in some regions.
"Softer growth in lending to investors will ease some of the RBA's concerns of imbalances in the housing market," said Janu Chan, a senior economist at St George Bank, a unit of Westpac Banking Corp. "Today's data suggests that the RBA has some breathing room and should give greater comfort to lower official interest rates again."
The central bank held its overnight cash target at a record-low 2.25 per cent this month and said it could ease at future meetings. All 26 economists surveyed by Bloomberg expect the RBA to cut the rate by 25 basis points when its board meets May 5.
