The Reserve Bank’s decision to hold the cash rate has been slammed by leading industry stakeholders.
The Housing Institute of Australia (HIA) labelled the decision ‘entirely the wrong call’.
“Given the current global and domestic economic conditions a rate cut today would have been the appropriate call, but regrettably the Reserve Bank Board did not take that decision,” HIA senior economist Andrew Harvey said.
“There is still a high degree of uncertainty with regards to the global economy and, outside of mining and mining-related investment, there is very little driving the Australian economy."
“The expectation for a rate cut today had grown substantially over past weeks and with inflation well-contained there was ample room for the RBA to provide interest rate relief.”
Mr Harvey’s comments were echoed by 1300HomeLoan managing director John Kolenda, who said the decision was “diabolical”.
“The situation out there is diabolical, but it seems like the RBA has lost touch with the parts of the economy which most Australians depend on for their livelihoods and is just making monetary policy for the miners.”
The Real Estate Institute of Australia (REIA) has also slated the decision.
“Current inflation figures are well within the Reserve Bank of Australia’s (RBA) target zone of 2-3 per cent with expectations that this will fall further. This together with low levels of demand in many sectors of the economy should have provided a clear indicator to cut rates,” REIA president Pamela Bennett said.
"A cut would have assisted those who are currently paying off a mortgage and would provide the encouragement needed for first home buyers.”