By a staff reporter
The demand for home loans rose less than expected in May, according to the Australian Bureau of Statistics.
The data showed the number of home loans granted in May lifted a seasonally adjusted 1.8 per cent to 49,636.
The result compares to an initially reported 48,475 in April.
Bloomberg had expected the number of housing finance commitments to rise by 2.2 per cent in May.
Total housing finance by value rose two per cent in May, seasonally adjusted, to $23.433 billion.
Westpac senior economist Matthew Hassan said the figures showed the housing sector was on the road to recovery but that it was happening slower than expected, given record low interest rates.
"Given the degree of stimulus that we've seen, particularly from interest rate cuts, you might expect a stronger recovery at this stage, so in a sense, it's still a little bit disappointing," Mr Hassan said.
"The recovery has been slow to come through and the response to interest rate cuts does appear to have been more muted than usual.
"The question is whether that recovery is strong enough, given the drag starting to come through from the mining sector.
"Given where interest rates are and the requirements for non-mining sectors to pick up the slack from the mining downturn, there's quite a high hurdle here for maintaining growth."