Master Builders Australia welcomed the decision by the Reserve Bank this week to lower official interest rates, saying that it should help to turn around weak trading conditions facing the building industry.
The Housing Industry Association (HIA) commented that the decision to cut interest rates for a second consecutive month sends a positive message to households and businesses, however ‘a 50 basis point cut would not have been out of line’.
Master Builders chief executive officer Wilhelm Harnisch said the rate cut should provide further relief for a building industry clearly in the slow lane of the economy.
"The immediate challenge ahead for the building sector is to restore confidence to drive a private sector recovery in both the housing and commercial building markets, he said.
"The industry is hopeful that the second consecutive interest rate cut will work to boost confidence and stabilise an uncertain market."
He added: "The Reserve Bank should not rule out further rate cuts to underpin the Australian economy and help drive a sustainable recovery in the building industry."
HIA chief economist, Dr Harley Dale said: "Hopefully the situation in Europe doesn't deteriorate markedly from here. If it does the RBA has today taken out some further, appropriate insurance which doesn't dilute its ability to engage in more aggressive action in early 2012 should that unfortunate outcome prove unavoidable,”
He said as new housing activity is staring down the barrel of re-hitting GFC lows.
"It is incumbent on Australia's banks to now pass the rate cut on in full rather than unnecessarily denting confidence and the efficacy of today's RBA action by refusing to do so," added Dale.??
