The latest Statement of Monetary Policy (SoMP) from the Reserve Bank of Australia (RBA) warned that the recent house price correction, coupled with the federal budget’s investor tax changes, elevated interest rates, and rising construction costs, will hamper new home construction, limiting supply. “While many housing builders continue to work through their existing pipelines, construction activity is expected to slow over the year ahead given lower sales volumes over recent months”, the RBA SoMP notes. Contacts cite a range of drivers for this softer sales outlook, including higher interest rates and borrowing costs, elevated construction costs and the uncertain outlook for housing prices (in part due to tax and other policy changes)”.