REA Group Senior Economist Angus Moore discusses the key costs for home builders as auction clearance rates drop alongside interest rates.

“Two of the key costs for home builders are obviously the cost of building the home but also the cost of financing, and so as we are starting to see rates fall, that is going to start to make a lot more projects a bit more feasible,” Mr Moore told Sky News Australia.

“The fact we are starting to see home prices grow, in a bit more broad base … more than we were last year, that is also going to start to make more projects feasible and encourage home builders to start those projects … hopefully as rates start to come through that is what we will start to see.”

In partnership with realestate.com.au.