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The Reserve Bank of Australia’s decision to keep the official cash rate on hold has been welcomed by property and finance industry figures.
Loan Market chief operating officer Dean Rushton said considering the shaky global markets, leaving the cash rate on hold at 4.75 per cent was a sensible step.
“The RBA staying on the sidelines is the right call in the current circumstances as the conditions in Australia are also of concern as we are caught in a boom and gloom economic cycle,” he said.
The financial state of both Europe and the United States were key international factors which influenced the Reserve Bank’s decision, as well as difficult conditions locally, according to the bank’s monetary policy statement.
“Several sectors in the domestic economy are still hurting, retail spending remains soft and many households need the rate reprieve to continue as they battle cost of living increases,” Mr Rushton said.
Housing Industry Association chief economist Harley Dale also welcomed the decision, commenting that it would avoid further aggravating an already slumping housing sector.
"We are seeing persistent weakness in the crucial new home building sector and indeed the situation is deteriorating," said Dr Dale.
“There is an increasing risk that, sharp drops around the GST and GFC notwithstanding, 2011/12 will mark the weakest period for new home building in the last fifteen years. That is with interest rates where they are.”