The government needs to make radical changes to property policies in order to avert an economic crisis, the Housing Institute of Australia has claimed.
“Policy makers have misread the Australian economy and action is required now,” HIA chief economist Dr Harley Dale said.
“The Federal Government needs to abandon its 2012/13 surplus pledge as it risks doing serious damage to the Australian economy.”
In conjunction with policy changes, Mr Dale said it was now crucial for the Reserve bank to cut rates.
“A 50 basis point cut in interest rates is required on May 1 and the banks need to pass that on that in full.”
Loan Market also called on the RBA to stop “fence sitting” and cut interest rates.
“The simple truth is that the RBA ‘wait and see’ pattern is coming to a head,” Loan Market corporate spokesperson Paul Smith said.
Mr Smith said the central bank’s next board meeting may still leave consumers uncertain over the direction of home loan rates due to lenders having a track record of moving independently of the RBA’s rate decisions.
But Mr Smith said that even though lenders are dealing with a challenging funding environment, the RBA still has significant influence over the home finance market.