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HIA warns Reserve Bank on interest rates

The Housing Industry Association has voiced concerns over the pace of interest rate rises after a new report showed residential building work slumped 2.5% in the December quarter.

New South Wales suffered the most with a drop of 5.3%, followed by South Australia on 4.8% and Victoria on 3.3%.

Both houses and units saw declines in construction. House building was down 1.1% to $6.2bn and unit building down 5.8% to $2.6bn.

HIA chief economist Harley Dale warned of the shaky prospects for a post-stimulus housing recovery. "Recent updates have highlighted falling new home lending, sluggish housing credit growth, and a loss of momentum in building approvals and new home sales," he said.

"That's not good news for a sustainable new home building recovery and highlights the need for a cautious approach to interest rates."

By BN | 15 Apr 2010

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