The Master Builders' Association (MBA) has warned that the fall in Australian home commencements over the December quarter indicates the need for further action from the government and the banking sector to revitalise the market.
Peter Jones, MBA chief economist, said that without any kind of policy change the residential housing market is unlikely to improve.
"Builders have reported an across-the-board slowing in sales in line with poor confidence and consumer caution," he noted.
He added that further interest rate cuts are necessary in order to encourage building to increase in the sector, with a major shortfall in dwellings highlighting the need for the building industry to improve its performance over the coming year.
"Australia needs to build 200,000-plus dwellings each year for a number of years," argued Mr Jones.
Commonwealth Bank senior economist Michael Workman recently told the Australian that last year's rate cuts from the Reserve Bank of Australia have yet to have too much of an impact on the property industry.
Posted by Steve Douglas
