Economists have told the Herald Sun newspaper that interest rates are likely to fall further in a bid to boost the less than buoyant housing market.
In a welcome boost for home owners, the anticipated lowering of the cash rate is expected to provide a boost to the real estate sector and hopefully boosts the number of sales across the country.
The combination of a weaker than expected housing market and a slowdown in mining activity could lead to a rate cut which would bring official cash rates to 3.25 per cent, which is the lowest since the very worst of the GFC.
This is despite the fact that there was a rise in national dwelling commencements, with a rise of 4.6 per cent in the June quarter.
Chief economist for Master Builders Australia Peter Jones said that decisions and policies from government and the reserve bank will have a major impact on the viability of the building industry and subsequently the real estate sector.
"Further rate cuts from the Reserve Bank are needed to turn consumer pessimism around and ensure that demand recovers.
"Removing policies that work to restrict supply must be a focus for all governments. Policies that prevent the residential building industry meeting the serious undersupply of housing must be addressed. Poor land release strategies and inefficient developer charges should be the first place to start."
