MBA: Cash Rate Cut Will Kick-Start Housing Recovery

The latest cash rate cut could make an essential contribution to recovery in the Australian housing market - but only if banks pass the latest reduction on in full.

This is the opinion of Wilhelm Harnisch, chief executive officer of Master Builders Australia (MBA), who asserted that the rate must immediately be passed on in full to real estate owners and small businesses.

He explained that as activity in the mining industry begins to slow down, the housing industry is poised to fill the gap in the market - but only if support is provided to the building and construction sectors.

Mr Hamsch said: "The building and construction industry hopes the latest rate cut will act as a circuit breaker to restore confidence, reverse negative trends that have appeared recently in some of the forward indicators and kick-start a recovery in the housing sector."

He urged banks to pass the rate cut on completely noting that the financial institutions who recently announced large profits have a "moral obligation" to do so.

"The economy cannot afford to have the Reserve Bank's heavy lifting to improve consumer confidence, be undermined by the banks," he concluded.