The Reserve Bank’s decision to hike the official cash rate again has not been welcomed by the building and construction industry.
According to the Master Builders’ Housing Policy director Paul Bidwell, the industry is fearful that housing supply will buckle under the rate hike as a result of a decrease in urban development.
“The housing industry needs breathing space to allow market conditions and demand to stabilise,” Mr Bidwell told the Northside Chronicle.
“We are concerned the RBA’s decision to increase interest rates will dampen building activity, while the industry is on the verge of recovery.”
NSW Urban Taskforce chief executive officer Aaron Gadiel agrees.
According to Mr Gadiel, the latest rate rise will undermine the demand for housing and boost the holding costs faced by developers. Mr Gadiel said the rate rise will also make it more difficult for developers to demonstrate project viability.
“Each interest rate rise is tantamount to a game of Russian roulette with Australia’s housing supply,” Mr Gadiel said.