Australian property body the Housing Industry Association (HIA) has warned that the Reserve Bank of Australia's (RBA's) widely anticipated decision to keep interest rates steady at 4.25 per cent could be a risk in an already-depressed property market.
HIA chief economist Harvey Dale argued that the "fractured" state of Australian businesses means there is an increasingly heterogeneous picture emerging from the data, something which can get lost in the macroeconomic analysis engaged in by the RBA.
This can lead to a lot of firms suffering without the relief offered by a cut to interest rates, Mr Dale added.
Instead of this helping hand "businesses and households count the potential cost from the possibility of further out-of-tune rate hikes from the banks", the economist concluded.
The HIA has been adamantly in favour of further rate cuts for several months, arguing last month that the fall in building approvals provides a lucid explanation of the need for more incentives from the central bank and the government.
Posted by Steve Douglas
