Latest rate decision won't let home buyers "catch a break," exec says
Queensland’s peak real estate body has slammed the Reserve Bank’s decision to hike interest rates after pausing last month.
Dean Milton, chief operating officer for the Real Estate Institute of Queensland, said the RBA’s decision this week to resume its aggressive tightening policy would heavily impact homeowners and investors.
“We have seen regulatory chaos from state and federal governments, and whiplashing back to another interest rate rise only adds to this pain,” Milton said. “There’s barely been time for the market to absorb the lagged impact of the previous 10 consecutive rises and reassess the approach based on this. Equally, it’s difficult to see how would-be buyers can catch a break when their borrowing capacity has been on such unsteady footing.”
Milton said that economic conditions were already inhibiting future housing supply.
“Building approvals for houses are down, which will have impacts on short- to medium-term supply, and lending statistics are also showing buyer activity is continuing on a downward trend,” he said. “Inflation in Queensland is being driven by inelastic goods and services such as electricity, up 32.5%, and health, up 6% for the quarter – which interest rates do nothing to quell.”
Milton called for state, federal and local governments to “do their part” to curb inflation.
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“Fiscal policy needs to match monetary policy, and what we need now is action to remove impediments to new housing supply, investment in social housing, and a focus on overall spending to ensure it does not lead to further increases in inflation,” he said.
REIQ welcomed the recent recommendations to overhaul the RBA following a sweeping review of the central bank. The federal government backed all 51 recommendations made by the review, including a plan to turn rate decisions over to a new board of experts.
“We welcome the refresh of the RBA, which brings it into line with other major central banks around the world,” Milton said. “More transparency is always welcome.”
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