A building industry group says new home sales dropped 9.4% in March and a welfare group says there is a housing affordability crisis in Australia.
Anglicare Australia says its research showed that only 0.002% of Melbourne and Sydney rental homes are affordable for low income earners.
The Housing Industry Association (HIA) survey of Australia’s 100 largest builders found Queensland suffered the biggest decline in new house sales, down 15.3%, followed by Western Australia down 12% and New South Wales down 9.7%.
HIA chief economist Harley Dale said RBA interest rate cuts, while no instant fix, could provide substantial assistance in restoring confidence and activity.
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“The bank needs to send a clear signal that it is back on the case of assisting an economy that is clearly weaker than it anticipated in 2012,” said Dale.
But any reduction in interest rates may increase housing prices further, which flows into rental prices.
An Anglicare examination of rental rates of 65,000 properties advertised during a weekend in mid-April found that many Australians in capital cities are being priced out of the rental market.
Anglicare executive director Kasy Chambers told reporters that housing stress was a national crisis and that an assessment of 20,000 Sydney and Melbourne dwellings found only 40 were suitable for low income earners.
“In Perth there is absolutely nothing available for anyone on a single income and these results are largely replicated across all our capital cities,” Chambers said.