Despite a significant amount of weak economic data since its last decision, the RBA opted to leave its main policy rate unchanged, said the Housing Industry Association, the voice of Australia’s residential building industry. Source: Timberbiz
“For those employed in the struggling residential construction industry, the March decision represents a missed opportunity,” said HIA Senior Economist, Shane Garrett.
“Monday’s building approvals release from the ABS reinforced that a sustained residential construction recovery is some way off.
“What’s good for the residential construction market is good for the wider economy. International factors have squeezed many sectors of the Australian economy and this calls for further action from the RBA,” he added.
“The tool of interest rate intervention is blunter now than it has been in previous downturns.
“Even the RBA’s own figures show that the banks have withheld 0.4% of the 1.75% in RBA rate cuts since 2011.
“RBA research also shows that a large chunk of households are using mortgage rate cuts to pay down existing debt rather than adding to spending in the economy.
“These two factors underline the urgency for a further move on rates, while there is nothing stopping Australia’s banks from passing on further interest rate relief themselves,” said Garrett.
