Second rate rise will hurt builders
The Housing Industry Association says that the second rise in official interest rates is unwelcome news for Australia’s residential building industry. The Reserve Bank announced the quarter percent rise on Wednesday.
“It is disappointing that the rise has been attributed to an overheated housing market,” says Dr Ron Silberberg, the Association’s managing director. “The housing market is two very different sectors. Growth in established home prices has been well publicised but it is the new home building industry that has kept prices under control, rising by only two percent last year.”
Silberberg says the new home building industry and the associated manufacturing industry put money back into the economy and provide jobs growth. The latest rise will affect confidence in this sector, he says.
“Monetary policy is a very blunt instrument and we call on the Reserve Bank to allow these recent moves to be absorbed into the economy before considering further rises,” he says.
Source: Building Products News.
7-Jun-2002