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Housing recovery in trouble: MBA
Released 12 April 2011



Recent rate rises and weak consumer confidence are threatening to derail Australia’s much needed housing recovery, according to building and construction organisation Master Builders Australia.    

MBA Chief Economist Peter Jones said, “The latest setback evidenced in the housing finance numbers is not primarily due to weather events and has a lot to do with household caution in the wake of recent rate rises by the Reserve Bank.”

He said the best possible interpretation of the housing finance numbers is that the decline suffered in 2009-10 has been arrested, but that the pace of recovery will be slow.

“Loans for construction of dwellings and purchase of new dwellings, combined, declined once again in February as the residual impact of higher interest rates works against a recovery in residential building.

“Still suffering from the credit squeeze and bank lending practices, it is critical for the interest rate sensitive residential building industry that there is an extended pause in Reserve Bank monetary policy.”