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THE Reserve Bank of Australia’s (RBA) decision to today lower the base interest rate by 0.25 per cent to 4.5 per cent is expected to bring long overdue reprieve for businesses.
The Real Estate Institute of Queensland (REIQ) welcomed the move, saying September quarter data from the Australian Bureau of Statistics shows inflation contained at 2.3 per cent.
REIQ chairman Pamela Bennett suggests the new rate confirms the RBA’s earlier views on the economy were off target.
“Anyone working within the property industry in Queensland knew months ago that our economy was far from running away from us, which was contrary to the Reserve Bank’s assessment,” says Bennett.
“In Queensland especially, the last year has been a struggle and not only because of the floods and Cyclone Yasi. There continues to be an over-arching mood of uncertainty amongst consumers and business owners, even though our state has been the recipient of billions of dollars of mining investment.”
Master Builders Queensland (MBQ) believes the lower interest rate offers better security for the sluggish building industry.
MBQ housing policy director Paul Bidwell says the $10,000 Building Boost’s failure to lure more new homebuyers should entice the RBA to make a second reduction in December.
“We hope the decision to cut the official interest rate will add significantly to confidence, encouraging consumers and investors that the time is right to build or buy a new house,” says Bidwell.
“A second cut in December will go even further to improving consumer confidence, particularly as we expect to see building activity levels improving in the coming months.”
The Chamber of Commerce & Industry Queensland (CCIQ) congratulated the RBA for giving small to medium enterprises (SME) reprieve from weak consumer spending and confidence.
CCIQ president David Goodwin says SMEs are experiencing challenging domestic cost pressures.
“These factors including external pressures like global instability, competitive online retailing and the high Australian dollar make it harder for SMEs to compete and grow,” says Goodwin.
“This cut in interest rates will alleviate some of the pressure on those SMEs who are borrowing to keep their business alive.”
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