Freezing interest rates would allow more building work to commence, as well as increase people's confidence in the Australian property market, an expert has suggested.
Peter Jones, chief economist at Master Builders Australia, said that it is not recent natural disasters that had caused confidence in the market to fall, but increases in rates by the Reserve Bank of Australia.
"Still suffering from the credit squeeze and bank lending practices, it is critical for the interest rate sensitive residential building industry that there is an extended pause in Reserve Bank monetary policy," he added.
Mr Jones went on to say that rents and house prices could increase as more people chase the existing housing stock and that the government should remove impediments that affect the supply of property in Australia.
David Airey, president of the Real Estate Institute of Australia recently supported Mr Jones' views, stating that increases in interest rates caused the decrease in finance commitments in February.
Posted by Steve Douglas
