The economic barometer is starting to point to "stormy" as interest rates rise. There are signs that people are postponing purchases they don't have to make.
In two of the best indicators of financial pain or gain, businesses say trade is being affected. In used cars and home improvement, potential customers are pulling back when rates rise.
"There's a big effect," Jayme Field of House of Cars said. "It's so much harder to finance a $50,000 purchase," he said. Higher rates meant people would lower their sights, say from a $50,000 vehicle to a $30,000 one.
His business was nimble so it could adjust quickly but he said that in the industry as a whole prices were coming down.
A Range Rover which would sell for $120,000 a year ago was now going for $95,000, according to Dhruv Sachdev, director of Top Used Cars in Fyshwick. "Premium vehicles have been hit massively," he said.
He said people were trading down - trying to sell their existing prestige cars in exchange for cheaper models.
"A lot of people are downgrading their cars. They are selling high-end cars and buying lower end. There are more people enquiring to sell."
As well as people simply not having the disposable cash to spend on postponable purchases, actually getting loans is also harder, the car dealer said.
"Finance approvals are getting harder, and that has slowed down sales," Mr Sachdev said.
His business was affected but not by much, he felt. It makes its profits through the difference between the price he buys cars for and the price he can sell for. Both are falling but it means he has to do more research to keep across a changing market.
Another good economic barometer is home improvement. When rates rise and there's less cash about, home improvements get postponed. On the other hand, when there's a pause in rate rises, potential customers commit to the purchase.
When the Reserve Bank of Australia holds rates the same, for example, there's a spike in clients for CanKit which makes and fits flat-pack kitchens.
"COVID was a good time for us, because everyone just wanted to get their kitchens done straight away," Don Banlusak, who runs the Canberra company, said.
"But now that interest rates are going up, people are waiting to see what happens, and take longer to make decisions.
"But we also get more enquiries in those weeks after interest rates stay put."
The effect of the rate rises is felt by different parts of the economy differently. People (like public servants) with fixed incomes are hit by rising interest rates - mortgages cost more - but they aren't as hard hit as those whose incomes rise and fall with the economic tide.
"It really hasn't affected us," Patrick Braser of the Peter the Painter company said. It's been in business for 53 years and much of Mr Braser's work is for public servants. "The clientele that I have is high-end customers, so I don't really get hit too much," he said.
"I do private interiors, mainly private homes. Most of the people I work for are public servants. They are people with money. At the moment, it seems to be flowing quite well."
As rates rise, there is now a bit of wait-and-see. The winter is usually slow in the building trade so traders are waiting to see if interest rate rises dent any summer pick-up.
But carpenter John Verri of Patios Canberra is optimistic. "If you own your own house and you've still got a job, you've still got a bit of money. It'll be interesting to see what happens."
.
We've made it a whole lot easier for you to have your say. Our new comment platform requires only one log-in to access articles and to join the discussion on The Canberra Times website. Find out how to register so you can enjoy civil, friendly and engaging discussions. See our moderation policy here.
