Bold rates decision needed to turn housing tide
Published: 3 July 2012
The decision to keep interest rates on hold this month after two consecutive rate cuts is a blow for building activity in Queensland and has been met with disappointment by Master Builders, Queensland’s peak body for housing and construction.
Master Builders Director of Construction Policy, John Crittall, said it is a missed opportunity to build on the foundation of the last two cuts, further boost consumer confidence and in turn assist the recovery of Queensland’s housing sector.
“Despite two rate cuts and other positive factors such as stable employment and a stable Queensland economy, concern about the global economy and its impact on the local jobs market means there is a complete lack of consumer confidence, which is having a massive impact on building activity,” Mr Crittall said.
“The drop in building activity in April 2012 was surprising and disappointing, particularly given positive factors such as the Building Boost Grant and two consecutive rate cuts, and caused us to be very concerned that the emerging recovery might be faltering.
“While the announcement of a 12.3% increase to private sector house approvals in Queensland between April and May 2012 is a sign that our industry is taking some small but positive steps towards recovery, we believe a third cut rate was crucial to help to sustain the momentum.
“With rate cuts in November and December 2011 and again in May 2012 helping to sustain modest levels of growth, further cuts would be a welcome measure that would assist in stoking confidence and hopefully help to tip the scales in favour of housing activity.
“We are urging the Reserve Bank of Australia to consider the plight of the building industry and take positive action next month.”
Julie Russell, Manager – Corporate Affairs via email or phone (07) 3225 6436 or 0414 083 191.