Housing finance rise no cause for rate rise

The headline rise in housing finance in July is no cause for the Reserve Bank to raise rates, according to peak building and construction organization, Master Builders Australia

“The key finance indicators show that demand remains flat.” Mr Jones said, “Loans for construction of dwellings and purchase of new dwellings, combined, fell back in July but are almost on par with July last year and beginning to show signs that a period of unchanged interest rates may be working to at least stabilise demand as a precursor to an upswing in residential building.” He said, “The Reserve Bank has an important role in underpinning consumer confidence and needs to keep interest rates on hold to encourage an upswing in housing.”

“The period of rates stability has allowed the housing market to find a floor but consumer caution and overseas events appear set to work against any upswing.”

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