Rapid RBA rate hikes will run builders into ground, industry body warns

“Our industry is disproportionately affected by interest rises,” Wawn said.

A hard economic landing would “put at risk the viability” of many builders who survived the pandemic and were now being tested by severe supply chain pressures, she said.

“Many now lack the resilience to withstand more sharp economic shocks,” she said.

The RBA hikes have caught everyone by surprise, because throughout all last year the bank’s governor Philip Lowe had said interest rates would not likely rise until 2024.

Yesterday Lowe said more rate rises were likely in the coming months.

Wawn said the building association acknowledged the RBA had to tackle the dire effects of inflation, but she queried Lowe’s aggressive pulling of levers.

“We are concerned that a continuing regime of steep rate rises risks turning the economic dial too far in the opposition direction and stalling economic growth needed to for the continuing recovery from COVID,” she said.

“Time should be given to observe the impact of the monetary policy changes in the economy.”

Most market analysts have predicted the cash rate could end up somewhere between 2 per cent and 3 per cent.

Sub-contractors and tradies have been left out of pocket in the fallout, and many would-be homeowners have watched projects stall and lie dormant.