Sustained rate hold needed: Laing & Simmons
The Reserve Bank’s decision to keep rates on hold this month has been welcomed by the property industry but talk of future rate rises has been met with criticism and concern.
Laing and Simmons general manager Leanne Pilkington said constant talk of a future rate rise was “perplexing” given that another quarter of negative growth could place the country in a recession.
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“The recent March quarter contraction can be dismissed as being a result of the natural disasters, but the figures are more than just a blip on the radar,” she said.
“House prices are declining in value in some markets, many homeowners are finding themselves in a position of negative equity, and clearance rates are down.”
Ms Pilkington said a rate hike in July or August could damage the market and consumer confidence further.
“The question has to be asked: why would the RBA even be entertaining the idea of interest rate rises in the current climate?
“As some analysts have pointed out, perhaps it’s time the RBA took a more transparent approach to the reasons for its decisions, particularly if the market is to be slugged with another rate rise in the coming months.”
