HIA praises decision to keep cash rate at current level

The Housing Industry Association (HIA) has backed the decision made by the Reserve Bank of Australia (RBA) to keep the interest rates at 4.75 per cent.

Speaking to the South-West News, chief economist for the HIA Dr Harley Dale said the new home building sector is "substantially weaker this year compared to last".

He suggested that the resolution could be beneficial for the new home building industry, adding that the weakness seen this year has occurred despite interest rates remaining at 4.75 per cent since November 2010.

"Rates on hold marked a good and appropriate decision today despite recent hyped-up calls from some quarters for a near term hike," Dr Dale commented.

Last month, UBS strategist Matthew Johnson said he believed that the RBA would keep rates steady for a couple of months, but that there would be an increase by the end of the year.

He told the Herald Sun that rates might be tightened during the third quarter of 2011.

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