Housing Industry Association , the voice of Australia’s residential
building industry, reports that the Reserve Bank Board has voted to maintain
the interest rates for the sixteenth consecutive month.
According to HIA Chief Economist, Harley Dale, Australia is on track to
experience its longest period of interest rate stability in modern history with
no hint of a short term interest rate rise in the RBA’s statement.
Harley Dale notes that borrowing costs are set to remain at or close to
record lows for some time to come; the super low interest rates have unleashed
substantial pent-up demand for new housing to the benefit of many parts of
Australia’s domestic economy beyond residential construction.
He observed that the interest rate boost to the new home building sector
has almost run its course, although the pipeline of new residential
construction activity is very healthy. However, a large number of aspiring home
buyers will continue to be locked out of the new housing market due to lack of
titled residential land, excessive planning delays and restrictions, and various
taxes and charges that combine to make new housing one of the most heavily
taxed sectors of the Australian economy.
Harley Dale concludes that low interest rates will not fix these constraints;
however, a lack of policy action to address these issues robs the Australian
economy of a further burst of growth in new housing supply.
