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Policy changes needed to ensure residential building recovery

Policy changes and an interest rate freeze are required if building recovery is to take place next year, according to Master Builders.

Policy changes are needed in order for the positive steps that have been made towards building recovery to continue in the new year, Master Builders has claimed.

Peter Jones, chief economist at the building and construction industry association, said that the degree of recovery made so far could stall if interest rates rise again.

"A period of interest rate stability from the Reserve Bank [of Australia] will be critical to ensure that an upswing in the interest-rate-sensitive residential building sector becomes entrenched," he added.

Mr Jones went on to say that there is currently an undersupply of housing in Australia and that failing to meet this could lead to higher rents and house prices as more people chase the few properties available.

Earlier this month, property expert John McGrath wrote in his blog that the Australian property market will experience a turnaround for the better in 2011, with Sydney, Melbourne and Canberra leading the way into recovery.

Posted by Ravin Chatlani

- property, policy, building, construction

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