Rising Interest Rates Send Australian Housing Market into Free Fall
The Reserve Bank of Australia's fourth interest rate hike this year has sent shockwaves through the housing industry, according to the Housing Industry Association.
HIA senior economist Tom Devitt believes that higher interest rates will further reduce the number of new homes built in Australia, at a time when increased supply is needed to address the affordability challenge.
New home sales have fallen for four consecutive months, down by almost 20% for the quarter, and Devitt warns that interest rates and tax increases may reduce the number of new homes built without reducing the demand for housing.
The HIA has called on governments to take action to improve affordability, including reducing taxes, infrastructure charges, regulatory costs, and delays imposed on new housing projects.