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Interest rates can fall

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The Real Estate Institute o f Australia said today that he continuing slide in building approvals tn d prospect o f slower economic growth will add pressure to drop further official interest rates.

President o f RE1A, Gary Taplin said that the 7.9 percent fall in building approvals (seasonnaly adjusted) for April showed a compounding slow down in the housing sector.

‘'A pprovals are now 24,3 percent down on April 1994 with housing finance commitments lower by 30 percent for new homes.

“ Sales turnover is lower and falling In many pails o f Australia and oversupply has undercut hom e values in areas o f most capital cities.

“While identifying a clear turning point In economic activity is difficult, R EIA considers that Australia’s economic grow th forecast does not warrant any further interest rate rises.

“I f anything Australia’s real rate o f interest is still high by com parison with com petitors' economies, ·

“Bank margins are strong and housing based lending profits are high. This leaves room for cuts in housing rates by banks.

“R EIA has yet to see competition between banks leading to cuts in variable home loan rates as it has for fixed rales loans applying to a minority o f borrow ers,” M r Taplin said.

F o r fu rth e r Info rm atio n co n tact;

M r Gary Taplin President REIA 08 233 5222 (w) 08 364 3501 (h)

M r Philip Eliason Chief Executive Officer REIA 06 282 4277 (w) 06 273 5238 (h)

R e d I Es t a t e ; I n s t i t u t e o f A u s t r a l i a L t d


PO Box 234 Cuitin ACT 2805, Real Estate House 1 l" i Thesiger Court Dcakln z\CT 2600 Tel: 61 6 282 4277 Fax: 61 6 285 2441 ACN 008 652 597