Harry Triguboff says interest rates must fall next week

Meriton boss Harry Triguboff expects the Reserve Bank to cut interest rates at its meeting next week (December 6) and says reducing the lending rate is one of the best ways to encourage people back into the property market.

“If we want to see the economy improve, we must do more to help people invest in property. 

“Keeping interest rates low is a very good place to start,” he says. 

Triguboff also backed the property market over the share market, saying investing in the share market should be secondary to investing in the property market. 

“When the stock market crashes, you need something ‘concrete’ to fall back on,” he says. 

“To build a better economy, we need to build more housing. We need to make it easier for young people and investors to enter the property market and councils must make the approval process faster so we can build more, sooner. 

“Help people get started, help them invest, help them use their superannuation for property. Get them into bricks and mortar.” 

Triguboff made his comments on the need for an interest rate cut following the launch of his latest project, Oceanvale at Warriewood in Northern Sydney, where prices begin at $425,000 for a one-bedroom unit.

Speaking yesterday at the AICC 2011 Annual Property Lunch in Sydney, he warned of the growing impact of global factors, in particurlar China on Australia’s economy.

“If China does something different, it affects us, even if it has nothing to do with us. Before we had to think only of ourselves, now we have to think of the whole world,” he said.

He says there is a growing demand for one-bedroom apartments and Meriton will build more one-bedroom units as people are less willing to share.

Triguboff’s comments follow the release of the government’s mid-year budget review yesterday with plans to cut spending over the next four years and reduced growth forecasts with the Organisation for Economic Cooperation and Development downgrading Australia's economic growth for calendar 2011 from 2.9% to 1.8%.

AMP chief economist Shane Oliver said yesterday that he expected the RBA to cut rates in December, arguing that waiting until February 7 meeting would be too high a risk due to “the increase threat from the Eurozone debt crisis, rising bank funding costs and increasing fiscal drag following federal government belt tightening”.