INDUSTRY groups have criticised the Reserve Bank’s move to increase interest rates a second time in recent months.
The Reserve Bank should hold off any further rate rises until the two recent increases work through the economy, warned the Real Estate Institute of WA.
REIWA president Jim Henneberry said the interest rate changes would take several months to impact on the market.
“The Reserve Bank should have waited to see the impact in January and February, of the first rate rise,” he said.
The proportion of home sales to new stock for sale in Perth fell from 95 per cent in June to 65 per cent in November.
Mr Henneberry said the Reserve Bank should not be so trigger happy with interest rates.
“The real estate market has stabilised and further increases in interest rates are not necessary.”
According to the Master Builders Association of WA, the increases in interest rates were unnecessary as the housing market was already slowing down.
MBA housing director Gavan Forster said the recent increase would lead to the further slowdown in the housing market from mid 2004.
“The Reserve Bank has overreacted to housing market conditions which were already cooling,” he said.
The mistakes of the Reserve Bank had cost Western Australians in the past, according to Roy Weston chief executive Geoff Baldwin.
“History shows that the Reserve Bank tends to make mistakes in the timing of interest rate increases and the severity of the rises,” Mr Baldwin said.
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