Predicted rate cut 'must be passed on in full'
A further cut to the cash rate next month will only be effective if it is passed on in full, according to the Housing Industry Association (HIA).
The HIA's senior economist Andrew Harvey remarked this week (January 25) that the latest December quarter headline inflation results show that a cut to the cash rate would be a "prudent course of action" by the Reserve Bank of Australia.
Ongoing global economic turmoil - particularly in Europe - also point to the need for a rate cut, said Harvey.
"There should be no question as to a rate cut in February," he explained.
Harvey added: "It is appropriate that further interest rate cuts starting next month are accompanied by targeted government stimulus measures to help insulate Australia against what appears to be a deteriorating situation in Europe."
Meanwhile, as Queensland gears up for a state election, the HIA has welcomed the Property and Construction Strategy released by the LNP earlier this week.
Warwick Temby, Queensland executive director at the HIA, asserted that an approach that addresses regulation and taxation in the home building sector is needed.
He also applauded the LNP's commitment to the current government's extension of the $10,000 Building Boost scheme.