Written by: Peter Jones, Chief Economist, 10 Sep 2012

The housing sector continues to demonstrate little sign of an imminent recovery after figures released today by the Australian Bureau of Statistics showed a fall in housing finance commitments for July.

Combined figures for finance for the construction and purchase of new dwellings fell 1.9 per cent in July, seasonally adjusted.

Peter Jones, Chief Economist at Master Builders Australia said the figures were disappointing given nascent signs of improvement in the past few months.

“The July figures failed to build on previous positive momentum and unless sentiment shifts, residential builders are in for more tough times as recovery looks likely to be many months away.

“Lack of confidence and ‘flat to falling’ house prices mean the four rate cuts over the past nine months have failed to boost household confidence, forestalling purchasing decisions.

“The industry needs the rate cuts to take hold and provide the spark for a recovery for the housing sector.

“If as suspected, the previous rate cuts have failed to take hold, the Reserve Bank needs to act,” Mr Jones concluded.