The Reserve Bank Board on Tuesday voted to extend the period of steady interest rates to 16 consecutive months, said the Housing Industry Association, the voice of Australia’s residential building industry.
“With no hint of a short term interest rate rise in the RBA’s statement today, Australia is on track to experience its longest period of interest rate stability in modern history,” HIA chief economist Dr Harley Dale said.
“Borrowing costs are set to remain at or close to record lows for some time to come.
“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.
“The interest rate boost to the new home building sector has almost run its race, although the pipeline of new residential construction activity is very healthy – elevated levels of new home construction should persist for a considerable time.
He said this will still leave a large number of aspiring home buyers locked out of the new housing market.
“There is a lack of titled residential land, excessive planning delays and restrictions, and a plethora of taxes and charges which combine to make new housing one of the most heavily taxed sectors of the Australian economy,” he added.
“Low interest rates don’t fix those constraints, but a lack of policy action to address them robs the Australian economy of a further burst of growth in new housing supply.”
