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ISCOVER
Staff Reporter
The rising unemployment rate and slow home loan growth has forced the Reserve Bank to cut the official cash rate.
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At its board meeting earlier today, the RBA decided it was prudent to cut the official cash rate 25 basis points, taking it to the historic low of 2.75 per cent.
RP Data’s national research director Tim Lawless said while the Reserve Bank was likely to be “reasonably comfortable” with the pace of the housing market recovery, there were no doubt a few things playing on the Board’s mind when making this month’s cash rate decision.
“What may have been most concerning to the RBA though is the pace of dwelling construction and consumer appetite for newly constructed homes,” he said.
“Dwelling approvals and commencements remains weak and although new home sales have improved, according to the HIA, the number sold remains historically low.
”If we are to see the construction sector pick up where the mining boom is leaving off, lower interest rates may be the catalyst that is required.”
