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Two industry leaders say the Reserve Bank got it right on Tuesday when it kept the cash rate on hold amid concerns that housing affordability is spiralling out of control.
Laing+Simmons managing director and incoming REINSW president Leanne Pilkington says the RBA had neither the justification nor the desire to reduce the official cash rate after the rate cuts last year.
Ms Pilkington said further easing is not needed in the current cycle, and obtaining housing finance at attractive terms is already possible many Australians.
“It’s those without the means, stuck in the rental cycle or unable to accumulate a suitable deposit, that face the greatest challenge in the market,” she said.
Ms Pilkington said more rate cuts are not a solution to the housing affordability problem.
“From a housing industry perspective, rates are already low and have been for some time, so that piece of the affordability puzzle is in place.
“It’s through other avenues like stamp duty reform that improvements in affordability need to be addressed.”
Current REINSW president John Cunningham agreed with Ms Pilkington, saying housing affordability will be “hotly debated” this year.
“We expect more stock to come to market this year and we hope that that will cause the market to become more settled,” Mr Cunningham said.
“An emphasis will again be placed on first home buyers and there will be much debate this year on ways to improve their plight.”
In 2016, the RBA cut interest rates twice – in August and May. However, the major banks made the decision to independently increase interest rates.
The RBA will next meet on Tuesday, 7 March.
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