Confidence, not rates, key factor

BOOSTING confidence in the community is more important than cutting interest rates, a leading Sunshine Coast real estate agent said yesterday.

Confidence is needed to boost the housing market on the Sunshine Coast. Picture: Claudia Baxter

BOOSTING confidence in the community is more important than cutting interest rates, a leading Sunshine Coast real estate agent said yesterday.

His comments come as the Reserve Bank of Australia meets today to consider whether to adjust official interest rates.

The National Retail Association has called on the RBA to cut rates to boost retail sales and protect jobs.

However Rob Midgley, of Just Real Estate, which is marketing Parklakes estate at Bli Bli, said while a cut in interest rates was always welcome it was unlikely to result in a big boost in house sales.

He said the $15,000 first home grant that kicked in for new home buyers on September 12 had had a negligible positive impact to date, and any interest rate cut would be in the same league.

Mr Midgley said it was more a case of overcoming the "if you're not spending, you're not doing anything wrong" mentality.

"It's a lack of confidence in our economy, that's the problem without a doubt," he said. "Interest rates are important, but they're not the overriding thing."

Bernie Sullivan, of Mooloolaba Business and Tourism, said a major hurdle to boosting tourism was the high Australian dollar, so any interest rate cut was secondary.

"It would certainly allow the general public to have a little bit of a breather. We've seen a number of months where the Reserve Bank has held its position," he said.

"Is it going to lower our dollar? I don't think so."

Trevor Evans, the NRA's executive director, said retailing was a barometer of the health of the Australian economy, and most business owners were struggling to make ends meet.

ODDS IN FAVOUR OF RATE CUT

Sportsbet.com.au said money favours interest rate cut of between 0.26% and 0.5%.

$1.60 - decrease between 0.01 and 0.25% (out from $1.50)

$2 - stay the same (out from $1.90)

$10 - decrease between 0.26 and 0.5% (in from $19)

$51 - decrease 0.51% or more (steady)

$81 - any increase (steady)

*bracketed figures are from Sunday

Originally published as Confidence, not rates, key factor