The Housing Industry Association (HIA) has stated that the Reserve Bank of Australia's (RBA) decision to leave official interest rates on hold is the correct one.
Amid signs that the global economy is stabilizing and that domestic inflation will continue to subside the RBA has left official interest rates at an all time low of 3 per cent. Ron Silberberg HIA's managing director stated that current mortgage rates were not a barrier to economic recovery.
Mr. Silberberg stated that the RBA did the right thing by not reducing interest rates at this time so as to keep it ready for a future need.
The main area of concern relates to the availability of credit for potential borrowers and competition in the home mortgage market. Due to tighter credit control by the banks HIA members have reported an increase in cancellations of new-build contracts.
Mr. Silberberg also added that non-bank home loan lenders need government assistance if the housing market is to recover. Meanwhile superannuation funds should be encouraged to reassess their lack of investment in mortgage-backed securities.