THE Housing Industry Association says the RBA should exercise caution in raising interest rates too quickly.
The move came after the RBA raised the cash rate to 4 per cent, the highest since February 2009, from 3.75 per cent after its board meeting.
"HIA recognises the need to return interest rates to normal levels over the course of economic recovery but cautions against haste,'' said HIA senior economist Ben Phillips.
The HIA said there were still considerable concerns over the state of the global economy.
"Interest rate increases provide further bad news to first home buyers,'' Mr Phillips said.
"The removal of the first home buyers boost and interest rate increases in the December quarter of 2009 saw a record drop in affordability according to the HIA/CBA Affordability Index,'' he said.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
He said that without further strong growth in residential construction during 2011 and 2010, Australia's shortage of housing stocks will become more acute, delivering undue upwards pressure on rents and existing home values.
Price drop means low interest ratesNew home sales at five-month high
