NAB jobs data risks rate cut

Let’s chat about what’s happening with interest rates and why it matters for your commercial property loans. The latest business data has dropped, and it’s painting an interesting picture that could affect your lending decisions.

Here’s the inside track: While banks are dangling some tempting fixed rates in front of us, the economic story behind the scenes is pretty fascinating. NAB’s latest survey shows that businesses are still struggling to find workers – a whopping 82% of them! And when it’s hard to find staff, wages tend to go up, which is exactly what’s happening.

What does this mean for interest rates?

Well, although I’m in a minority in thinking rates will stay the same, the experts say we’re likely to see our first rate cut in February, don’t expect rates to come tumbling down quickly. The RBA is watching the job market closely, and with workers still having the upper hand, they’re likely to take things slow and steady.

Think of it this way: If you fix your commercial loan now, it’s a bit like buying next season’s footy tickets at current prices when you know they might be on sale later – but you’re not quite sure how big the discount will be.
Some interesting nuggets from the latest data:

* Businesses are more worried about wage costs than interest rates.
* Different industries are having very different experiences (hospitality and finance are doing well, while retail’s doing it tough).
* Each state’s telling its own story (Queensland and NSW businesses are feeling pretty good).

So, what’s a savvy commercial property owner to do?

Your Options:

a) The ‘Best of Both Worlds’ Approach: Split your loan between fixed and variable rates. It’s like having a foot in both camps.

b) The ‘Wait and See’ Strategy: Stick with variable rates for now, but budget conservatively.

c) The ‘Safety Net’ Play: If you’re in retail or another challenging sector, maybe fix a portion to help you sleep at night.

Remember though, every property and business is different. What works for the office building down the street might not work for your warehouse or retail space.

While the banks are pushing hard with their fixed rate deals right now, they’re probably expecting rates to fall further. They’re not in the business of losing money, after all!

Want to chat about what this means for your specific situation? Let’s look at your properties, your plans, and figure out the best strategy together. No pressure, just practical solutions for your business.

After all, making the right call on your commercial property loans isn’t just about today’s rates – it’s about setting your business up for success over the long haul. And with the market throwing us some interesting curveballs, it’s worth taking a moment to get this right.