Sydney harbour. Picture: John Appleyard

October saw a sustained increase in home buying intentions from Australians with the interest levels now back to those previously seen in the first half of 2017, according to the Commonwealth Bank.

The Commonwealth Bank’s Household Spending Intention report for October found the increased interest in buying a home is consistent with the steady pick-up in house prices.

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According to the report, the Reserve Bank is happy to let this current trend run – for now.

Pedestrians walk past the Reserve Bank of Australia headquarters in Sydney. Photographer: Brendon Thorne/Bloomberg

“Housing lending is turning up – lending over the four months to September grew at an annualised pace of 52 per cent and that certainly looks fast enough to give some boost to housing credit outstanding,” the report said.

“The one area where monetary policy stimulus is clearly working is the housing market.

“Home buying intentions rose further in October and are now close to the record highs seen in H1 2017.”

CoreLogic head of research Tim Lawless.

CoreLogic head of research Tim Lawless said recent interest rate cuts and an increased borrowing capacity through relaxed serviceability rules is encouraging more buyers onto the market.

“The expectation that they will move lower – along with better affordability – are factors contributing to the rebound,” he said.

“Credit availability remains the wildcard in a material bounce-back in turnover … as gaining loan approval remains a challenge for many borrowers, despite the lowest mortgage rates since the 1950s,” Mr Lawless said.