Australian Home Loans unexpectedly fell 7.9 percent in January, marking the largest decline in nearly a decade, after the central bank raised interest rates while the government reduced cash handouts to first-time homebuyers. Excluding refinancing of existing mortgages, loans fell by an even more pronounced 8.2 percent. The Value of Loans fell 5 percent, the most since April 2008. Reserve Bank of Australia Governor Glenn Stevens has previously acknowledged that “lenders have generally raised rates a little more than the [central bank’s benchmark borrowing costs] over recent months.” Grants for Australians purchasing their first home were reduced to their original amount of A$7,000 in January after being tripled to A$21,000 as part of the 2008 stimulus package.
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