The Housing Industry Association (HIA), the voice of Australia’s
residential building industry, reports that the RBA has left its key interest
rate unchanged at 2.25 per cent at its March meeting.
HIA Senior Economist, Shane Garrett commented that the decision will disappoint
mortgage borrowers and small businesses who had been hoping for a second
interest rate cut.
Observing that many areas of domestic demand are struggling at this
time, with business investment failing to respond to low rates, and
unemployment continuing to drift upwards, Shane Garrett noted there was
expectation that the RBA would reduce interest rates to provide additional
support.
However, the good news is that new home building is providing vital
support to demand, with ABS data showing new dwelling approvals hitting another
new record in January.
With the RBA strongly hinting that rates may be lowered in the months
ahead, Shane Garrett urged further reduction in interest rates in April to
dispel any uncertainty.
