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HIA welcomes RBA decision
Released 3 August 2011

The Housing Industry Association (HIA) has welcomed the decision by the RBA to keep interest rates on hold at 4.75%.    

HIA Chief Economist Harley Dale said in times of heightened economic uncertainty the normal ‘rules’ shouldn’t apply and keeping rates on hold is the course the RBA should continue to steer in 2011.

“With fragile business and consumer confidence, the damage that could be wrought to the economy by lifting interest rates far outweighs any supposed risk of holding fire,” he said.

Dale noted there was persistent weakness in the crucial new home building sector which he believes is deteriorating.

“There is an increasing risk that, sharp drops around the GST and GFC notwithstanding, 2011/12 will mark the weakest period for new home building in the last fifteen years. That is with interest rates where they are.”

The RBA last lifted interest rates in November 2010.