A further reduction in the official cash rate would have a positive effect on residential building and the wider economy, the Housing Industry Association (HIA) has said.
The residential building industry organisation is calling for the Reserve Bank (RBA) to reduce the cash rate when it meets again in early August.
HIA senior economist Shane Garrett said there was significant room to move and that waiting would add to existing uncertainty as the federal election looms.
“Independent research has demonstrated that a growing residential construction industry has very positive effects on the wider economy,” Mr Garrett said.
"A second rate cut for the year on August 6 would bolster the prospects that the body of residential construction demand currently stuck in a pre-election holding pattern can subsequently be released.
“Historically, weak levels of home building at a time of an ever increasing population is constraining Australia's growth and prosperity,” warned Mr Garrett.
He said June’s increase in unemployment to 5.7 per cent was worrying in an economy where job security concerns “remain a prominent handbrake on residential construction activity”.