By: Belinda Luc
Housing Industry Association (HIA) chief economist Dr Harley Dale has called on the RBA to keep rates on hold, following disappointing building approvals in May 2010.
According to the Australian Bureau of Statistics, housing approvals fell in five of the six states.
Tasmania and Western Australia suffered the highest falls in building approvals in seasonally adjusted terms, plummeting by 24.6 per cent 13.9 per cent respectively.
South Australia was the only state to experience an upswing in building approvals - lifting 30.6 per cent.
HIA’s Dr Harley Dale said higher interest rates and supply side constraints continued to weigh down the new home building industry.
“Now that the positive impact of past policy stimulus – low interest rates, the first time buyer boost, and social housing provision - is well beyond the peak, cracks have appeared in the sustainability of Australia?s new home building recovery,” Dr Dale said.
“Steady interest rates are the clear signal from today’s building approvals release,” he said.
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