Menu
News

Rates decision hits business

LOAN holders might have more options but small businesses will be the ones to suffer as interest rates are kept on hold by the Reserve Bank of Australia.

Chamber of Commerce and Industry Queensland general manager Nick Behrens said the Reserve Bank had missed an opportunity to alleviate business costs and spur consumer spending and as a result small to medium businesses would continue to struggle with weaker sales, poor confidence and decreasing profitability.

Mortgage Choice Victoria Street principal Graham Bowling said rates had been stable for a while.

"Currently, lenders are offering better rate discounts on variable rates... over the past month fixed rates have tumbled," he said.

Fixed interest rates were now below the 7% average, which had been maintained over the last 10 years, Mr Bowling said.

"... fixed rates are sitting at 6.5% and for that reason people are choosing to fix their loans or part of their loans as this will give protection against further rate rises."

Mr Bowling said there had also been a spike in the building/construction sector on the back of the $10,000 State Government Grant to home builders.

"We've seen first home buyers coming back onto the market because they can actually use the $10,000 and the $7000 home owner's grant as part of their deposit," he said.

"With rates down and a government concession, there is certainly a reason to jump back into the property market because conditions are good in that respect."

With the current cycle, Mr Bowling said it was a good time to review lending and home loans as there could be a better deal available.

Mr Behrens said small to medium businesses in Queensland were experiencing challenging domestic pressures at the present, including low consumer confidence and higher than average operating costs.

"The conundrum for our businesses is that monetary policy is being determined by economic parameters distorted by the resources sector," he said.

"These factors, including external pressures like global instability, competitive online retailing and the high Australian dollar, are making it harder for (small to medium enterprises) to compete and grow."

Topics:  interest rates loan reserve bank of australia small business


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Region faces wild wind

DESTROYED: Half of the roof of the Moranbah home was ripped off from the 104km/h wind.

Moranbah residents say weather is worse than the cyclone.

Heroic rescue saves life

CLOSE CALL: Leslie Cruthers and Buddha at the spot the playful pup fell into the Nogoa River.

Kayakers rush to save dog walker clinging to riverbank.

National super star at age 13

Competing in Rotorua, New Zealand earlier this year.

Dingo local takes on international motocross competition.

Local Partners