The number of new home loans grew only 0.4% in February, down from 4.3% in January. Many economists surveyed for Bloomberg expected them to grow 2 per cent.
The Australian Bureau of Statistics released the data just one day after the Reserve Bank announced a 0.25% cut to official rates.
So far, only ANZ and Commonwealth Bank have cut home loan rates, only passing on a small part of the rate cut. Both banks cut their standard variable rate by 0.1per cent.
''It was a bit weaker than we expected,'' said JP Morgan economist Helen Kevans. ''First home buyer demand is really driving the market but the rest of the market is falling off quite quickly.''
A rise of 2.7% for owner-occupied homes in February, seasonally adjusted, was offset by investment loans falling 2.8%, the data showed.
This resulted in a total increase in loans to $19.2 billion, seasonally adjusted, in February from $18.9 billion in January, the ABS said. Official interest rates fell to a 49-year low of 3% yesterday, as the RBA attempts to help Australia's real estate and housing markets.The RBA has slashed 425 basis points from the cash rate since September.
February home loans increased for the fifth consecutive month, credited to the doubling of the First Home Owner Grant October to $14,000 for existing homes.
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