Media Release
2 November 2010
RATE RISE RISKS HOUSING BACK IN THE SLOW LANE
Statement by Wilhelm Harnisch, Chief Executive
Australia’s peak building and construction industry association, Master Builders Australia,
expressed surprise and concern arising from
today’s decision by the Reserve Bank of
Australia to raise the official cash rate by one quarter of a percentage point.
Mr Wilhelm Harnisch, Chief Executive, said “Master Builders was surprised by the timing
of today’s rate rise given the current inflation outlook.”
He said, “The timing of the rate rise will make it difficult for a private sector housing
recovery in circumstances where investor confidence remains weak.”
He said, “Master Builders calls on the banks not to lift rates beyond the move in the official
cash rate.”
Master Builders
also expressed deep concern that today’s rate rise can only further
dampen the confidence of both new home buyers and investors.”
Mr Harnisch expressed concern that today’s decision could see the new residential building
sector head for the slow lane in the two speed economy.
“The investor-driven component of the new housing market is critical in terms of ensuring an
adequate supply of affordable housing
that in turn is so
important to Australia’s productive
capacity.”
Mr Harnisch
said, “The risk is that the Reserve Bank’s interest rate strategy will only
exacerbate an already significant undersupply of housing and put further pressure on rising
rents which feed into consumer price inflation.”
“The rate rise places even more pressure on all levels of government to confront the chronic
housing shortage.”
For further information contact:
Wilhelm Harnisch, Chief Executive: Office (02) 6202 8888, Mobile 0402 039 039
Peter Jones, Chief Economist: Office (02) 6202 8888
NEWS 
