By Robert Carry
Yesterday's rate rise by The Reserve Bank of Australia's (RBA will do nothing to boost the supply of housing, which is essential to moderate existing house price and rent pressures, the Housing Institute of Australia's (HIA) chief economist has claimed.
The HIA's Harley Dale pointed out that the new home building recovery will fall well short of the underlying requirement for new dwellings. He continued, "After today's increase, it would be prudent for the RBA to sit on its hands and assess economic developments domestically and globally."
Dale said the impact of rising interest rates can fall "very unevenly" on different sectors of the economy, consumers and small businesses.
"There is no justification for retail lenders to act off their own bat and move rates beyond the change in the official cash rate," he added.