![Loan approvals show recovery](http://web.archive.org./web/20131016044119im_/http://resources1.news.com.au/images/2013/08/08/1226693/314305-8384a08e-ffb7-11e2-82b8-914bfdeffb39.jpg)
Loan approvals have fallen for the first time this year. Source: News Limited
![Loan approvals show recovery](http://web.archive.org./web/20131016044119im_/http://resources0.news.com.au/images/2013/08/08/1226693/314336-8384a08e-ffb7-11e2-82b8-914bfdeffb39.jpg)
Loan approvals have fallen. Source: News Limited
HOME loan approvals have fallen for the first time this year, but economists expect the housing sector to strengthen in the months to come.
The number of home loans approved in August fell 3.9 per cent, the Australian Bureau of Statistics said, more than the 2.5 per cent fall economists had expected.
CommSec chief economist Craig James said the housing sector has been strong all year, and one month's fall is not significant.
"It's August data ahead of a September federal election, and it may have been a number of buyers were holding off until the election was out of the way," he said.
"The auction results over the past weekend in Sydney and Melbourne were reasonably buoyant, there's no anecdotal evidence the housing market is losing pace."
Mr James said a number of analysts have expressed concern about the excessive strength of the housing market over the past month, but the August data shows that some prospective buyers may be shying away from the market because of higher prices.
He still thinks the Reserve Bank of Australia will keep its cash rate unchanged at a record low of 2.5 per cent, as long as the US government comes to an agreement on the country's debt ceiling.
RBC fixed income and currency strategist Michael Turner said a correction in August after a string of rises in home loan approvals was to be expected.
"It is unlikely to mark the beginning of a weakening trend," Mr Turner said.
"We continue to expect modest growth in residential construction over coming quarters.
"Supply has picked up at a slower pace, with construction likely to add only modestly to growth in coming quarters."
Mr Turner said the Reserve Bank of Australia's August cash rate cut, to 2.5 per cent, should give the housing finance figures a boost later in the year.
All major banks followed the RBA's lead in August by cutting their standard variable rates by a quarter of a percentage point or more.
"We expect the market for homes to remain broadly firm into year-end as the market adjusts to the August rate cut," Mr Turner said.
"The flow-through to construction activity remains muted, however, despite the signals provided by higher prices."
RENTINGFind out how to rent the property of your dreams
Champagne views on a beer budget
![Champagne views on a beer budget](http://web.archive.org./web/20131016044119im_/http://resources2.news.com.au/images/2013/10/14/1226739/468578-1b2710d4-33e8-11e3-af60-3b458a25efb9.jpg)
A GROUP of "million-dollar squatters" living with coastal views under cosy rent deals are to be evicted.
SELLING Learn all the tricks to get the best price for your property
Margaret Olley's terrace up for sale
![Olley's terrace up for sale](http://web.archive.org./web/20131016044119im_/http://resources0.news.com.au/images/2013/10/15/1226740/054728-a701d240-3462-11e3-8ea9-26db26ac81ae.jpg)
IT LOOKS like any other Sydney terrace but when Margaret Olley's home goes on the market, buyers will be vying for a slice of Australian history.
INVESTING Get the best bang for your buck in the property market
Gen Y lead the way on renovation
![Home renovations](http://web.archive.org./web/20131016044119im_/http://resources3.news.com.au/images/2013/07/03/1226673/831751-home-renovations.jpg)
SO much for partying. It turns out a weekend at Bunnings is all Gen Y really wants, with two thirds of 18 to 25-year-olds planning to renovate this year.