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HIA predicts continued weakness in construction

HIA says failure to cut rates could cause slow movement in residential construction to continue.

Following the Reserve Bank of Australia's (RBA) decision to keep interest rates on hold, the Housing Industry Association (HIA) has said that the slow movement of housing construction is set to continue.

It explained that by failing to cut rates, the RBA has held businesses and households back from getting the support they need. As a result, residential construction has not been moving fast enough.

Senior economist for the HIA Shane Garret said: "A unilateral rate cut from them over the next couple of days would add to the prospects for a decent and a sustainable residential construction recovery."

However, other experts have seen positive movements within the Australian property market. The Real Estate Institute of Australia welcomed the decision to put rates on hold as it said investors and first time buyers were already taking advantage of the cheaper mortgages. Yet it did add that more could be done to get first time buyers onto the property ladder.

Posted by Ravin Chatlani

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