A chance missed: REIA

The Riverine Herald - Local Real Estate - - LOCALREALESTATE.COM.AU -

The Re­serve Bank’s decision to leave rates un­changed is dis­ap­point­ing news for home buy­ers, ac­cord­ing to the Real Es­tate In­sti­tute of Australia (REIA). ‘‘The lat­est Con­sumer Price In­dex (CPI) fig­ures are well within the Re­serve Bank of Australia’s tar­get zone of 2 to 3 per cent and should have pro­vided a clear in­di­ca­tor to cut rates,’’ REIA pres­i­dent Pamela Ben­nett said. ‘‘The RBA’S gov­er­nor has even in­di­cated that he ex­pects in­fla­tion to fall fur­ther in the next quar­ter or two. ‘‘A fur­ther cut would have as­sisted those who are cur­rently pay­ing off a mort­gage and would have been the en­cour­age­ment needed for first-home buy­ers.’’ The REIA’S De­posit Power Hous­ing Af­ford­abil­ity Re­port for the Septem­ber quar­ter showed a a small im­prove­ment in hous­ing af­ford­abil­ity but REIA would like to see a greater change over con­sec­u­tive quar­ters. ‘‘We know that first-home buy­ers are start­ing to re­turn to the prop­erty mar­ket but an­other re­duc­tion would have as­sisted in stim­u­lat­ing the lower end of the mar­ket and pro­vided a rip­ple ef­fect to those buy­ers trad­ing up,’’ Ms Ben­nett said. ‘‘Although just one com­po­nent of the so­lu­tion, lower in­ter­est rates are needed to re­duce the pro­por­tion of in­come that Aus­tralians are spend­ing on loan re­pay­ments in an ef­fort to im­prove hous­ing af­ford­abil­ity.’’ Hous­ing In­dus­try As­so­ci­a­tion be­lieves the decision was a missed chance to bol­ster busi­ness and house­hold con­fi­dence. ‘‘A rate cut would have been ap­pro­pri­ate for cur­rent eco­nomic con­di­tions, but sadly that decision was not taken,’’ HIA chief econ­o­mist Har­ley Dale said. ‘‘The global and do­mes­tic eco­nomic out­look re­mains clouded, within which new hous­ing ac­tiv­ity in Australia faces the risk of re-vis­it­ing GFC lows.’’ He said the lack of move­ment fol­lows wide­spread ex­pec­ta­tion for a cut and an in­creas­ingly ag­gres­sive de­bate re­gard­ing what Australia’s banks would and should do with such a cut. ‘‘Against this back­drop, leav­ing rates un­changed has the po­ten­tial to weigh down on con­fi­dence and non-re­source eco­nomic ac­tiv­ity,’’ Mr Dale said. He said de­spite the RBA’S decision, it would be help­ful if banks moved to pro­vide some fur­ther in­ter­est rate re­lief to Aus­tralian busi­nesses.

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