Nation’s Experts Split On Cash Rate Rise
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Nation’s Experts Split On Cash Rate Rise

A survey of economists unsure of rate rise before the end of 2022.

By Terry Christodoulou
Tue, Feb 1, 2022 11:12amGrey Clock 2 min

While almost all 36 panellists surveyed in this month’s Finder RBA Cash Rate Survey (94%) expect a cash rate hold to be announced in February, the same sentiment is not held for the year ahead.

More than half (58%) are predicting a rise this year while just 1 in 5 of the experts panelled expect the rise to happen in the first half of the year.

Graham Cooke, head of consumer research at Finder, noted a shift in expectations of a rate rise in 2022.

“A rate rise this year has moved from an ‘impossibility’ to a ‘most likely’,” said Mr Cooke.

“With some lenders indicating multiple rises to come, Australian borrowers who purchased over the last few years of rock-bottom rates may be in for a shock when their mortgage costs start to climb.”

Many experts have cited the concern of inflation and the unemployment figures reaching the RBA’s target ahead of schedule as a reason to get moving.

Ben Udy, from Capital Economics thinks that the first rate hike will come in the middle part of the year.

“While the RBA has previously said that it would not raise rates until wage growth was at least 3%, we think the strength in underlying inflation along with the tight labour market will convince the Bank to hike rates first in August and lift rates to 1.25% by the end of 2023,” Udy said.

However, opposing Ben Udy, Saul Elake of Corinna Economic Advisory states three reasons we won’t see a rate rise this year.

“One, underlying inflation has only just entered the target band after more than 5 years below it, and remains lower than in most other advanced economies.

“Two, wage inflation is nowhere near the 3.5% the RBA has said it needs to be to be consistent with inflation being ‘sustainably’ within the target band.

“Three, the RBA has a looser inflation target than most other ‘advanced’ economy central banks,” Eslake said.

It begs the question, how much will average mortgages rise when rates do.

Almost all experts believe that rates have hit rock bottom (96%).

Graham Cooke’s advice is to lock in a loan at a very low rate.

“The days of sub-2% home loans are almost behind us, and may never return. If you are in a position to lock on a very low rate with your current lender, or by switching, there has never been a better time to do it,” Mr Cooke said.

Westpac is expecting the RBA to raise the cash rate 6 times in the next 2 years, starting in August this year.

This would bring the official cash rate up from 0.10% at present to 1.50% in 2 years’ time – a jump of 1.4% on what homeowners are paying now.

On a $500,000 home loan, a rate hike from 2.00% to 3.40% would cost homeowners $369 more per month or $4,428 more per year.


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You’ll never guess where they found a little extra room when renovating this west coast house

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There was a time, not too long ago, when the most important must-have for would-be renovators was space. It was all about space to be together and space to be apart.

But as house prices increase across the country, the conversation has started to shift from size for the sake of it towards more flexible, well-designed spaces better suited to contemporary living.

For the owners of this 1920s weatherboard workers’ cottage in Fremantle, the emphasis was less on having an abundance of room and more about creating cohesive environments that could still maintain their own distinct moods. Key to achieving this was manipulating the floorplan in such a way that it could draw in light, giving the impression at least of a larger footprint. 

See more stories like this in the latest issue of Kanebridge Quarterly magazine. Order your copy here

Positioned on a site that fell three metres from street level, the humble four-room residence had been added to over the years. First order of business for local architect Philip Stejskal was to strip the house back to its original state.

“In this case, they were not quality additions,” Stejskal says. “Sometimes it is important to make sure later additions are not lean-tos.”

The decision to demolish was not taken lightly. 

“Sometimes they can be as historically significant as the original building and need to be considered — I wouldn’t want people to demolish our addition in 50 years’ time.”

Northern light hits the site diagonally, so the design solution was to open up the side of the house via a spacious courtyard to maximise opportunities to draw natural light in. However, this had a knock-on effect.

A central courtyard captures northern light. Image: Bo Wong

“We had to make space in the middle of the site to get light in,” Stejskal says. “That was one of the first moves, but that created another issue because we would be looking onto the back of the neighbouring building at less appealing things, like their aircon unit.”

To draw attention away from the undesirable view, Stejskal designed a modern-day ‘folly’.

“It’s a chimney and lookout and it was created to give us something nice to look at in the living space and in the kitchen,” Stejskal says. 

“With a growing family, the idea was to create a space where people could find a bit of solitude. It does have views to the wider locality but you can also see the port and you can connect to the street as well.”

A garden tap has also been installed to allow for a herb garden at the top of the steps.

“That’s the plan anyway,”  he says. 

A modern day ‘folly’ provides an unexpected breakout space with room for a rooftop herb garden. Image: Bo Wong

Conjuring up space has been at the core of this project, from the basement-style garaging to the use of the central courtyard to create a pavilion-like addition.

The original cottage now consists of two bedrooms, with a central hallway leading onto a spacious reception and living area. Here, the large kitchen and dining spaces wrap around the courtyard, offering easy access to outdoor spaces via large sliding doors.

Moments of solitude and privacy have been secreted throughout the floorplan, with clever placement of built-in window seats and the crow’s nest lookout on the roof, ideal for morning coffee and sunset drinks.

The house has three bedrooms, including a spacious master suite with walk-in robe and ensuite overlooking the back garden. Adjustable blades on the bedroom windows allow for the control of light, as well as privacy. Although the house was designed pre COVID, it offers the sensibility so many sought through that time — sanctuary, comfort and retreat.

Adjustable blades allow the owners to control light on the upper floor. Image: Bo Wong

“When the clients came to us, they wanted a house that was flexible enough to cater for the unknown and changes in the family into the future,” Stejskal says. “We gave the owners a series of spaces and a certain variety or moods, regardless of the occasion. We wanted it to be a space that would support that.”

Mood has also been manipulated through the choice of materials. Stejskal has used common materials such as timber and brick, but in unexpected ways to create spaces that are at once sumptuous but also in keeping with the origins of the existing building.

Externally, the brickwork has been finished in beaded pointing, a style of bricklaying that has a softening effect on the varied colours of bricks. For the flooring, crazy paving in the courtyard contrasts with the controlled lines of tiles laid in a stack bond pattern. Close attention has also been paid to the use of veneer on select joinery in the house, championing the beauty of Australian timbers with a lustrous finish. 

“The joinery is finished in spotted gum veneer that has been rotary cut,” says Stejskal. “It is peeled off the log like you peel an apple to give you this different grain.”

Rotary cut timber reveals the beauty of the natural grain in the kitchen joinery. Image: Bo Wong

Even the laundry has been carefully considered.

“The laundry is like a zen space with bare stone,” he says. “We wanted these different moods and the landscape of rooms. We wanted to create a rich tapestry in this house.”

The owners now each experience the house differently, highlighting separate aspects of the building as their favourite parts. It’s quite an achievement when the site is not enormous. Maybe it’s not size that matters so much after all.


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