Second rate cut to tip the scales for housing activity
Published: 5 June 2012
Today’s decision by the Reserve Bank of Australia (RBA) to cut interest rates for the second consecutive month is an important decision in favour of Queensland’s housing sector.
The decision to cut rates by 25 basis points, which has been applauded by Master Builders, will go a long way to shoring up consumer confidence and assisting the recovery of Queensland’s housing sector.
Despite last month’s rate cut and other positive factors such as the Building Boost Grant, 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.
Building Approvals from the Australian Bureau of Statistics in recent months have demonstrated small but positive steps towards recovery. However, the most recent figures showed a surprising and disappointing drop in April 2012. Master Builders is concerned that this emerging recovery is faltering, confirming the building industry has a long way to go to a full recovery.
With rate cuts in November and December 2011 and again in May 2012 clearly helping to promote modest levels of growth, Master Builders strongly believes this second consecutive cut will assist to stoke consumer confidence and help to tip the scales in favour of housing activity and a recovery for the building industry.
For consumers and the industry to benefit from the RBA’s decision, it is essential that banks pass on the cut. A decision to not pass on the cut, particularly in the face of the current global economic uncertainty, would be a blow for the building industry.
Julie Russell, Manager – Corporate Affairs via email or phone (07) 3225 6436 or 0414 083 191.