Further rate cuts are needed to boost housing sector
Leaders at Master Builders Australia believe more interest rate cuts are required if the nation's housing sector is to recover.
The Reserve Bank of Australia (RBA) slashed the cash rate by 125 points between November 2011 and June 2012, but has been reluctant to lower it any further in the past few months.
Board members decided last week that the current rate of 3.5 per cent would suffice for yet another month, as the economy is performing relatively well.
However, chief executive of Master Builders Australia Peter Jones feels that poor housing finance figures from July show that recent rate reductions have failed to boost people's confidence and many Aussies are still reluctant to purchase a property.
Statistics indicated that finance for the construction and purchase of new dwellings fell by 1.9 per cent in July in seasonally adjusted terms.
"If as suspected, the previous rate cuts have failed to take hold, the Reserve Bank needs to act," Mr Jones remarked.
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