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Steady rates only sensible decision: HIA
Released 6 July 2011



The Reserve Bank of Australia’s made the only sensible decision on offer in keeping the official cash rate on hold for another month, according to the Housing Industry Association (HIA).    

On Tuesday (5 July 2011) the central bank kept rates at 4.75 per cent.
 
“There is no room for an interest rate hike which would be nothing but a blight on the current Australian economic landscape," HIA Chief Economist Harley Dale said.

"There's far more to the picture in the post-GFC world than the endless swirl of data updates, although on the new housing front these updates are unequivocally weak," Dale said.

He said businesses remain cautious amidst policy uncertainty and weakness in the non-resource sector.

“Meanwhile, household confidence appears fragile, caught as it is in a pincer movement between interest rate uncertainty and post-GFC blues on the one hand and the constant dribble about a fictitious house price bubble on the other.

"In this environment a rate hike would do considerably more damage than might have historically been expected, not in the least to the housing industry, and the Reserve Bank Board seem to understand that.

“They need to keep understanding that for the foreseeable future," Dale added.