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Building approvals recorded a massive 12.8 per cent decline in November in what was a blow to the ailing housing market and the biggest year on year slump in nearly eight years.
The news however adds weight to the argument for a substantial cut to the official cash rate next month.
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ABS data released yesterday showed total dwelling approvals have dropped by more than 30 per cent since November 2007.
Construction of other dwellings has contracted by more than 50 per cent.
Master Builders chief executive Peter Jones said more rate cuts are needed to ensure a recovery in the housing market and help cushion the wider economy from a major a downturn.
“Only sharply lower interest rates and further fiscal stimulus can offset the confidence-sapping effects of the global financial crisis and tight financial conditions.”
Mr Jones said soft conditions could be expected for much of calendar 2009 while the effects of looser fiscal and monetary policy should begin to flow through in the second half of the year.
