Haven – Winter 2024

Timing is everything

Fixed rates are dropping but beware locking in too soon.

How soon and how far will rates fall? It’s once again the million-dollar question as banks spy rate cuts on the horizon and begin slashing fixed rates to lock in borrowers.

In January 2024, the average variable rate for new home loans was 6.3 per cent, according to the Reserve Bank, while cuts to fixed rates have seen some fall below 6 per cent.1

The catch, of course, is borrowers who fix too early risk missing out on further falls – and some economists predict there are significant rate cuts to come.

In recent months, fixed-rate loans have been about as popular as anchovy ice cream, accounting for less than 3 per cent of all home lending and refinancing in January 2024.

That’s virtually nothing compared to a few years ago. In June 2021, approximately 45 per cent of home borrowing was on fixed rates as the RBA cash rate bottomed out at 0.1 per cent and Aussies raced to lock in record lows.

With rates at what’s roundly considered to be the peak of the cycle, it’s understandable no one’s really been rushing to fix. But in anticipation of the RBA entering an easing cycle, some lenders have started bumping up variable rates for new customers and cutting fixed rates.

Check the forecasts

While it’s impossible to pick the top and bottom of interest-rate cycles with certainty, looking at how experts expect things to play out provides a good gauge.

As of May 2024, economists from the big four banks (CommBank, Westpac Bank, NAB and ANZ Bank) have forecast RBA rate cuts of between 50 and 100 basis points (in normal speak that’s 0.5 to 1 per cent) over the period to August 2025.

With a cooling economy, the big four banks are predicting the RBA will begin cutting rates later this year.

CommBank has said they expect the RBA’s cash rate target to drop through 2025 leading to a cash rate of 3.1 per cent by the end of next year.2 If passed on in full – which is never a given –bank home loan rates could drop from mid-6s to averages just over 5 per cent.

In contrast, an economist at a non-major bank has recently predicted increases to the cash rate later this year. These forecasts are constantly changing as new economic data is released. The RBA itself has been very clear that as the economy moves, they will too. They have repeatedly said they are not ruling anything in or out. It is important to keep an eye on these forecasts and factor them in when considering whether to jump to a fixed rate.

1 Muroi Millie, ‘Tide has turned’: Banks start to cut fixed rates, Sydney Morning Herald, 2 February 2024.

What to weigh up

Aside from economic forecasts, borrowers’ individual circumstances are also part of the equation. Some questions to consider include:

• Are you likely to get a pay rise or lump sum that you may want to put on your mortgage? Many fixed rate home loans cannot be linked to offset accounts, so you’ll lose that ability to make additional repayments until the fixed term expires.

• Can it work short term? Some lenders have already slashed fixed rates, while debate rages over whether official interest rate cuts are coming in September 2024 or at the end of the year. In the meantime, borrowers who jump on a lower, short-term fixed rate with a view to either fixing again or jumping back to a lower variable rate may be able to make savings.

• Will rising property values offset higher rates? This should be a consideration for home buyers who may be keeping their powder dry waiting for rates to drop.

Running calculations for multiple scenarios isn’t simple, so a broker is a good starting point to wargame different options. It can help to get ahead of the game so you can work out what numbers make sense and be ready to jump if any fixed rate offers line up.

Split the difference

A growing trend for homeowners looking to hedge their bets is a split loan, where a portion is fixed and a portion variable. How borrowers work the split is flexible.

Again, a broker can help run the numbers on how different options could work. Splitting a home loan allows borrowers the flexibility to make extra repayments and use offset accounts (against the variable portion) while taking advantage of potentially lower rates (on the fixed portion).

If you’d like to find out the latest fixed rates loans offers, get in touch now.

Terms of venery

In linguistics, a collective noun is a word that refers to a collection of things taken as a whole. Some collective nouns are specific to one type of things, especially terms of venery, which identify groups of specific animals. Venery is a word for the sport of hunting, taken from the Latin venari meaning “to chase or pursue” and these terms originated in medieval hunting traditions. While this lesson in the scientific study of language is mildly interesting, it’s the whimsical terms used to describe the collections that we are here for. Commit a few of these to memory and drop them into a convo sometime. You’ll be sure to delight your listener.

A murder of crows.

A leap of leopards.

A parliament of owls.

A prickle of porcupines.

A peep of chicks.

A gaggle of geese.

An intrusion of cockroaches.

A dazzle of zebras.

A smack of jellyfish.

A skulk of foxes.

A sneak of weasels.

A shiver of sharks.

A waddle of penguins.

An ostentation of peacocks.

A conspiracy of lemurs.

A flamboyance of flamingos.

A clutter of cats.

A coalition of cheetahs.

A romp of otters.

A bloat of hippos.

A barrel of monkeys.

These bright and bold salt and pepper grinders are guaranteed to add a big pinch of personality to your kitchen.

www.areaware.com

Been starstruck and have a photo to prove it?

Send us photo evidence of you posing with a super-duper famous person, to be in the running to win $1,000. The entry of who we consider the most impressive in the fame stakes will win.

How: email a photo of you and a famous person together to havencompetitions@afgonline.com.au

placing Famous person in the subject line.

Include: your name, address, email, phone number and the name of your mortgage broker.

Dates: opens on May 13 and closes on July 8.

Winner: will be decided on July 9 and notified by telephone after this time.

Terms and conditions: visit http://bit.ly/HavenWin

HAVEN MONEY

Word on the street

What the most-searched property keywords say about us

Priorities have shifted away from work-from-home and toward making your home work for you, as cost-of-living pressures bite.

The annual realestate.com.au round up of the most popular search terms from 2023 reveals not only what words could help sell your home, but how our lives are changing.

Back in 2020, “study” came from nowhere to take out the number one spot. Now it doesn’t even crack the top five. Meanwhile, the two fastest movers of 2023 were “dual living” and “granny flat”, which climbed into the top 10.

Both reflect a growing demand for multi-generational living as children remain at home longer, or ageing parents move in with adult children.

The popularity of granny flats may also reveal many buyers are keen to find a second revenue stream to help pay rising mortgages. In response to the housing crisis, many councils have relaxed restrictions on building and renting second dwellings. Previously, many local government authorities required them to be occupied by relatives of the homeowner, but recently some State Governments have moved to allow granny flats to be rented on the open market, with local council approval.

Another fast-moving search term last year was “brick”, which, although it didn’t make the top five, was up 24 per cent in Victoria and 39 per cent in Tasmania. This indicates buyers are looking for more energy-efficient properties as heating costs soar. This energy-conscious house-hunting is an evolving trend that could mean efficiency search terms, such as “solar”, “Powerwall” and “EV charger” trending in 2024.

Across the country last year, the top five most often-searched keywords were:

These reveal a strong Aussie focus on lifestyle and staying cool, and are sure to stoke the endless debate on whether swimming pools actually add value.

According to Roy Morgan research from 2023, about 14 per cent, or one in seven Australians now live in a household with a pool. Data analysts at Ray White say pools, at a minimum, boost valuation by the cost of installation, but beyond that it’s difficult to quantify. However, a pool is likely to improve the sale price if you live in a suburb with a lot of swimming pools, where it may be an expectation.

In the State-by-State breakdown of top five lists, “swimming pool” topped search terms nearly everywhere, with the exceptions of South Australia and Tasmania, where it was pipped at the post by “garage”.

“Garage” finished second in most other States, which real estate agents speculate is linked to recent sharp rises in vehicle theft around the country, with people looking for somewhere more secure than just a driveway or carport to park their cars.

The most recent Australian Bureau of Statistics data released in 2023 indicates vehicle theft was the fastest-rising property crime and nearly 60 per cent of vehicles were stolen from outside a home.

In other anomalies, “church” proved a strangely popular search term in the Northern Territory and Tasmania. Buyers could be looking for bespoke church conversions, but more likely close proximity to a place of worship.

For homeowners looking to sell, weaving some of these popular keywords into advertising copy may help your home reach more eyes. But it also gives renovators a clue to which additions, such as a lock-up garage, may help sell their home.

Investors looking to buy a rental property will also be interested to know the most-searched rental keywords of 2023 on realestate.com.au were:

Budget chicken casserole

Feeling the pinch? With chicken drumsticks a cost-effective cut of meat, this hearty casserole is a budget-conscious and delicious dish that will feed four for under $20.

10 chicken drumsticks (skin on)

1 can brown lentils (don’t drain)

1 can white beans (drained)

While most of it aligns neatly with home buyers’ priorities, making your investment property pet-friendly and taking it to market furnished guarantees it will appeal to the broadest demographic. Although, with vacancy rates at an all-time low, the words “for rent” would probably do the job.

Most-searched words of 2023 on realestate.com.au

1 can diced tomatoes

6 button mushrooms, sliced

1 onion, diced

3 cloves garlic, chopped finely

2 small red chillis, chopped finely

1 bunch of coriander, chopped (stalks retained and chopped)

1 bunch parsley, chopped (stalks retained and chopped)

1 teaspoon dried oregano

Olive oil

Salt and pepper

½ cup white wine (or water)

Preheat oven to 225C.

Heat olive oil in a 30cm cast iron cassoulet pan with lid (or equivalent heavy pan with lid). Add the chicken drumsticks, season with salt and pepper. Cook on low heat, turning regularly, for 5-minutes. Remove drumsticks from pan and set aside.

Add to pan the onion, garlic, chilli and finely chopped stalks of the coriander and parsley. Cook this mix for a few minutes. Add mushrooms and cook for a further few minutes. Deglaze the pan with either half a cup of white wine or water. Add chopped coriander and parsley leaves. Add tin of diced tomatoes, lentils (with their juice) and drained white beans. Stir and cook on low heat for a further two minutes. Season with salt and pepper. Return chicken drumsticks to the pan, nestling them among the sauce. Sprinkle dried oregano leaves on top. Cover the pan with lid and place into preheated oven. Cook for one hour at 225C.

Serve with your favourite accompaniment such as mashed potato, polenta, rice or pasta.

Our pet lookalike comp confirms the theory that many people look like their pets! Congratulations to Kris for winning $1,000 thanks to an uncanny silver fox likeness to his dog Jill – we wouldn’t be surprised if they’ve both had a blow-dry for the photo!

A new benchmark?

Bans on engineered stone could reshape kitchen trends.

a $500 runner-up prize, with kitty Milo sharing both his dad’s ginger colouring… and expressions!

From July, Australia will become the first country to ban engineered-stone benchtops.

The moment the ban was announced in December last year, the scramble began to fill what will be an enormous gap in the market. About 60 per cent of all new homes built in Australia in 2021/22 had engineered stone benchtops, according to the Housing Industry Association.

That represents around 130,000 homeowners each year who will have to choose an alternate product.

While Caesarstone, one of the major brands in engineered stone, has confirmed plans to launch a crystalline silica-free range that mimics their existing engineered stone range before July, it may come at a higher price point.

In the meantime, more budget-friendly alternatives are jostling to catch consumers’ attention alongside the pricier natural stones.

Laminate

Like John Travolta in Pulp Fiction, laminate is on a mission to prove it’s not the dag you remember from the 1970s and 80s.

Modern laminates come in a huge range of on-trend colours and finishes including stone, wood and concrete-look prints that can be hard to tell from the real thing – apart from the price tag.

And in a bid to step up their stone game, Laminex last year released a high-end imitation marble called TrueScale. As the name suggests, it copies the pattern of natural marble slabs at scale. So, in a single 3600mm x 1800mm slab there are no pattern repeats, which are often the tell-tail sign of an imitator.

New fingerprint-resistant matte laminate finishes are also proving popular with designers. A matte black Fenix laminate benchtop has featured on trendsetting renovation show The Block. Pronounced “phoenix”, no doubt for its ability to rise from the ashes, this high-tech laminate can be repaired by running a warm iron over scratches.

Too much heat, however, is the enemy of laminate and one of its major downsides is that it can be scorched by a carelessly placed pot or oven dish.

Wood/bamboo

Wood and bamboo benchtops are gaining popularity as nature-based interior decorating tones, such as blues and greens, gain traction. These benchtops also pair beautifully with black cabinetry in Scandi-inspired kitchens.

While timber benchtops are a simple, sustainable and budget-friendly choice, be wary of putting wood around sinks as it’s hard to keep the moisture from seeping in and causing decolouration. Homeowners also need to beware of burning the surface with hot pots.

Kris and Jill

Statler and Milo

On the upside, wood can be easily sanded back and refinished. And homeowners don’t have to wait weeks for installation, as is often the case with stone.

Solid surface

Acrylic polymer, or solid surface as it is known, is a zero-silica product that has a lot to recommend it. It’s completely safe to cut and sand and, if damaged, can be easily repaired with fillers applied and sanded in situ.

Solid surface replicates the look of stone, although it is warm to the touch, rather than cool. Solid surface slabs can also be heat-moulded to virtually any shape and joins are invisible, creating seamless splashbacks.

This product has impressive green credentials too. Major solid surface brand Corian boasts its benchtops comprise 5-20 per cent recycled plastics and no offcuts go into landfill – they are either put back into product or used as road base.

On the downside, solid surface can look and feel a little more like the plastic it is, rather than the stone it aims to replicate.

Stainless steel

Stainless steel is hygienic, budget-friendly and can seamlessly roll up into a splashback. Possibly the only drawback to stainless steel is that it harks back to an era when Jennifer Aniston had the coolest haircut on the planet. But with many 90s trends doing the rounds again, perhaps it’s time for stainless steel to have another moment.

It’s the go-to surface for commercial kitchens because it’s easily the most practical –quick and easy to clean, hard to damage and it won’t send you broke. For keen home chefs, it’s also a great surface for mixing, kneading and rolling out dough and pastry.

Homeowners can cut costs by opting for practical stainless steel on rear benchtops and splashing cash on a statement stone island.

Porcelain

Hard-wearing porcelain has been touted as the successor to engineered stone, although it comes at a higher price. With a virtually unlimited range of patterns and finishes porcelain is fast becoming the designers’ darling.

Porcelain can mimic the look of marble, a trendy large-format terrazzo, or slate. Or come in bold block colours. Essentially it is tiles at scale.

Porcelain is also non-porous so, unlike some natural stones, it won’t stain, and the kiln finish means hot pots and pans are no bother.

An expensive option, porcelain slabs can be brittle and easily damaged. As the finish is only surface deep, any damage can expose the plain interior.

Natural stone

Like porcelain, natural stone is a more expensive option but has a timeless appeal. It is porous to varying degrees, spills need to be immediately cleaned and steer clear of turmeric lattes.

Natural stone will usually be sealed before installation to minimise issues and should be regularly re-sealed.

Popular benchtop stone includes:

Quartzite: Beautiful and dramatic, it is one of the most hard-wearing of all natural stones.

Granite: There is a reason people say “hard as granite”. It’s fine with a hot pot but needs regular resealing to resist staining.

Marble: One of the softer natural stones, marble is also the one most synonymous with luxury. It can be high maintenance and should be resealed as often as twice a year if you’re a keen cook (or clumsy red wine drinker). Unlike granite, marble can be scorched by hot pots.

Why has engineered stone been banned?

A spike in silicosis cases and deaths, particularly among stonemasons working with engineered stone, prompted the ban. Silicosis is a lung disease caused by breathing in tiny particles of silica called crystalline silica, which are released when stone is cut or ground. These particles get stuck in the lungs, causing scarring and fluid build-up, making it hard to breathe.

What about other stone products?

Engineered stone contains crystalline silica at much higher levels than other products. According to WorkSafe Victoria, engineered stone can have up to 95 per cent silica content compared to granite (25-60 per cent), porcelain (14-18 per cent) and marble (less than 5 per cent). Expert analysis has also indicated the composition of engineered stone poses unique hazards over other stone, Safe Work Australia has reported.

When will it take effect?

In most States and territories, the ban will take effect from 1 July 2024. However, at the time of writing, it was undetermined whether this date will mark a ban on sales and installation, or just sales.

Is it dangerous to have an engineered stone benchtop?

Work Safe Australia has reassured homeowners it is not dangerous to have an engineered stone benchtop. It is when it is cut or ground that crystalline silica particles are released.

More detailed information can be found at: safeworkaustralia.gov.au/esban/faq