The RBA’s decision to keep the official cash rate on hold will provide a nice confidence boost to the residential sector.
According to the Housing Industry Association’s senior economist Andrew Harvey, residential construction activity has been buckling under the weight of a range of factors, not the least being the already restrictive level of mortgage and business loan interest rates.
“Australia’s new home building market needs an extended period of interest rate stability to create an environment where confidence and activity have the opportunity to improve. It is appropriate that the Reserve Bank is signalling, through a consistent message, such a period of steady rates,” Mr Harvey said.
“Against this backdrop, and with building sector labour and materials more accessible than in periods of peak activity, we are seeing a lift in consumer interest for both new home building and renovations.”
At its March meeting yesterday, the board decided it was prudent to leave the cash rate on hold at 4.75 per cent for the fourth consecutive month.