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RBA must leave rates on hold
Real Estate Institute of NSW President, Mrs Cristine Castle, today called on the Reserve Bank of Australia to leave interest rates on hold to avoid a rental housing crisis in Sydney and reduce confidence in residential property market.
“If the RBA raises interest rates to dampen inflation caused by fuel prices, it will kill off the weak recovery in the residential property market and damage the State’s struggling economy,” Mrs Castle said.
“Of equal concern is the fact that any rate increase, even a quarter of a percent, will cause investors to shun residential property and create a rental housing crisis in Sydney that will hurt families and low income earners.”
Releasing the results of the Institute’s Residential Property Management Survey for April, Mrs Castle said the rental market across Sydney is reaching crisis levels with vacancy rates at their lowest levels for more than five years and continuing to spiral downwards.
“The vacancy rate across Sydney is now 1.9% and steadily deteriorating month by month,” Mrs Castle said.
“This is the tightest that vacancies have been since July 2000 and families and low income earners are finding it increasingly difficult to find a place to rent.”
“If the RBA scares off investors with a rate hike, the number of properties available for rent will fall further still,” she said.
Mrs Castle said it was now time for the State Government to step in and encourage private property investment before its crisis in public housing worsens.
“Demand is outstripping supply. There are simply not enough houses and flats to rent and rents are climbing. More families and low income earners will have no alternative but to seek public housing.”
Tables from the REINSW Residential Property Management Survey Results for April 2006
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