The group said the move was very much warranted, and was necessary in the future to counter any further deterioration in economic conditions and to shore up business and consumer sentiment.“The further slashing of interest rates is a clear indication that the RBA is deeply concerned over the rapid deterioration in economic conditions,” said Master Builders Australia chief executive Wilhelm Harnisch.“The extraordinary action by the RBA in reducing the cash rate by three percentage points in four months underlines the tough economic challenges ahead in 2009.” But Harnisch said the fortunes of the building and construction industry would be mixed. He said the commercial building sector would bear the major brunt of the global financial crisis, with new activity falling off significantly. “Infrastructure should fare better, underpinned by government nation building initiatives,” Harnisch said. “Reductions in mortgage interest rates since the RBA began lowering official rates in September will mean a $525 reduction on monthly payments on an average new housing loan, provided the banks pass on today’s cut in full.“The housing market should benefit from the government’s $21,000 First Home Owners Boost, the massive drop in mortgage rates, and the government’s $400 million social housing initiative announced at the November 9, 2008 COAG meeting.”
