Home loan approvals rise in August

Approved home loans has jumped by more than one per cent in August, showing signs of a market recovery.

The number of approved loans jumped from 45,021 to 45,821 - or just under two per cent at 1.8 per cent.

This surge is an important factor in gauging the return of the property sector,as the latter part of the year is a traditional time for growth in the number of properties bought and sold.

The number of approved home loans comes off the back of a recent rate cut, preceded by no change since May.

Janu Chan, an economist for St George, told the Australian Associated Press that this was a sign of improving conditions for home buyers.

"There is a definite upward trend in owner-occupier housing. That's certainly encouraging for the housing market, and is also in line with the stabilisation in house prices that we've seen in many states," she said.

Ted Kennedy from JP Morgan said that there is more good news for homebuyers on the way. He expects that before the year comes to a close, there will be a further interest rate cut to really intensify the recovery of the real estate market and the broader economic scene.