WA building approvals have climbed to their highest level in more than two years as the State's prospective homeowners start to take advantage of low interest rates.
But hopes of a further cut in interest rates at today's Reserve Bank board meeting are likely to be dashed despite further signs that key parts of the economy continue to struggle.
There have been growing signs of an improvement in the WA property sector for several months on the back of interest rate cuts.
Building approvals for December from the Australian Bureau of Statistics showed a drop of 4.4 per cent nationally.
In WA, they improved 1.3 per cent, the fifth consecutive monthly lift. Total approvals are now at their highest since April 2010.
It was a different story in Victoria where approvals dropped more than 12 per cent last month to be almost a quarter down on their mid-year high.
Further confirmation of the lift in WA was evident in figures from mortgage broker AFG.
Mortgages approved in WA last month were 41 per cent higher than a year ago, with the value of those mortgages up 37 per cent.
"Borrowers seem to be responding to the combination of a more positive global economic outlook, lower rates and enhanced affordability," AFG sales generation manager Mark Hewitt said.
Reserve board members will also focus on the state of the jobs market with employment figures due out on Thursday.
The ANZ Bank's measure of job advertisements was largely flat last month, although the fall in newspaper advertisements continued across the country.
It was the best performance in terms of job advertisements in almost a year but it still suggests employers are not keen to put on many staff.
A rate cut remains on the cards, probably next month or April, because of the way prices remain in check. TD Securities' monthly inflation gauge showed prices up 0.3 per cent last month to be 2.5 per cent through the year.The Australian Retailers Association said the Reserve should unleash more deep rate cuts. "To address a compromised economic situation, the Reserve Bank needs to cut official rates to 2.5 per cent to get variable mortgage rates to a level of 6 per cent," its executive director Russell Zimmerman said.
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