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REINSW Calls For Interest Rate Hold
Real Estate Institute of NSW President, Mrs Cristine Castle, has called on the Reserve Bank of Australia (RBA) to leave interest rates on hold.
She said an increase would stall the recovery of the residential property market, stifle housing investment and damage the NSW economy. She implored the RBA to consider these important consequences.
The RBA board meets tomorrow to decide whether it should help counter inflationary pressures by further lifting interest rates (with the announcement to be made at 9.30am on Wednesday). Experts are widely tipping the RBA to raise the official interest rate by .25%, taking it to a five-year high of 6 %. Some analysts are even tipping a further rate rise later this year.
Mrs Castle said she opposed any interest rate increase due to the corresponding detrimental effects on the property market and wider NSW economy.
“The industry is already faced with exorbitant infrastructure costs and increased interest rates will negatively impact on new housing development and housing affordability, further dampening investor sentiment,” she said.
Mrs Castle said the investment market needed encouragement, as renters continue to have a difficult time finding accommodation. “Demand is outstripping supply. There are simply not enough houses and flats to rent and rents are climbing,” she said.
The latest data from the REINSW Vacancy Rates survey for June showed a continued low level of available accommodation for renters in Sydney, at just 2.3%.
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