March 10, 2010 , Australia – The chief executive of Master Builders Australia, Wilhelm Harnisch has recently said his doubt in regards with the risk of the Reserve Bank of Australia new strategy to increase the official cash rate by an additional one quarter of a percentage point, the fourth increase in six months after rates bottomed at three per cent in April 2009. Harnisch was not in favour of this, as he warned the risk that might effect with this.
Harnisch said, “The RBA is embarking on a risky strategy for the building industry considering the still weak state of the economy and the weak housing recovery. Maintaining low interest rates is essential if the interest rate sensitive building and construction industry is to play a positive role in Australia’s economic recovery.
He added that this increase with the rate policy might put at danger and difficulty to the private sector in building schools program and social housing. This might cause to stop the commercial and residential projects, as having interest rates will just giving a huge dent to the buyer and their confidence to invest with a new home. The Australia’s chronic housing supply might be in difficult stage with the increase of the rate that will also put anxiety to all the levels of the government.
The Master Home Builders Australia will plan a new requirement to answer and solve the problem with the local government developer. According to Wilhelm Harnisch, this new RBA strategy is one of the most talked about issues of COAG this 2010.
Source: Architecture and Design
