The Housing Industry Association (HIA) is calling on the Reserve Bank to cut the official cash rate yet again in a bid to curb the decline in residential construction activity.
“The residential building industry is a key barometer of Australia’s economic health, but regrettably there is unequivocal evidence of a further deterioration in conditions following a very weak 2011," HIA managing director Shane Goodwin said.
"Business closures and job losses are mounting and thousands of small businesses face an even more challenging 2012 than last year.
"The RBA needs to cut rates and the banks need to follow suit in the national interest."
Mr Goodwin said there is also a range of government policies needing attention, including a strategy to encourage state and territory governments to reduce stamp duty on new homes, a building industry financing guarantee to offset the credit crunch, which is preventing residential developments from proceeding, amendment of capital allowance provisions to enable accelerated depreciation of new rental dwellings, and reinvigoration of a program of structural reform to housing supply.
"Housing is shelter, a necessity of life. Reducing the cost base of new housing, increasing housing supply, and boosting affordability are not only laudable policy aims, they are essential to a more productive Australian economy,” Mr Goodwin said.