Aussies to blow $485 million on Valentine's Day but scams are the real cost
Valentine's Day gifts - it's not all roses. The thinning ranks of super disruptors, and rate hikes add $12,000 annually to mortgage costs. Here are five things you may have missed this week.
Romantics set to spend $485 million this Valentine's day
Love-struck Aussies are set to splurge $485 million on Valentine's Day gifts (that's Tuesday, February 14, in case your other half hasn't dropped any hints).
The Australian Retailers Association (ARA) says flowers are the go-to choice for 42% of Valentine's Day gift-givers. Other popular presents include chocolates (29%), sex toys (7%) and dining out (7%).
The average Valentine's Day spend is about $118 per person. But some are digging a lot deeper to woo a love interest.
ARA CEO Paul Zahra, says, "One of the notable gifts recorded was a $350,000 Lamborghini - someone's going to have a great Valentine's Day."
Not just a day for romantics, Valentine's Day is also a favourite among crooks.
Ruth Talalla, ANZ scams portfolio lead, warns, "Romance scams are some of the most common scams we see at ANZ, particularly around Valentine's Day.
"Victims are more susceptible to baiting and phishing scams at this time of year and are often left in both financial and emotional distress," she says.
According to ScamWatch data, the majority of romance scam victims are under the age of 44 and are targeted through social media or dating apps.
Super disruptors more likely to disappear than disrupt
In the space of just a few years, almost all the superannuation 'disruptors' with products purpose-built for younger Australians, have either collapsed, been shut down or failed to resonate with their target market.
Super disruptors burst onto the scene in 2014 with the launch of Future Super and Virgin Super, quickly followed by the likes of Grow Super, Zuper, BrightDay and GigSuper.
At the peak, 30 challenger brands were hoping to take on the established industry and retail funds.
But by the end of 2022, only 14 super disruptors were still standing, and several more have closed their doors in early 2023.
The Federal Government's decision to allow Australians to withdraw up to $20,000 from super during the COVID-19 pandemic was a major factor in some disruptors disappearing.
"Poor product design didn't help either," says Alex Dunnin, executive director of research and compliance at Rainmaker Information.
"The median expense ratio for disruptor superannuation products being 1.15%pam, was 10% higher than the Rainmaker 2022 MySuper fee benchmark of 1.06%pa. Their high fees were a symptom of their lack of scale," he adds.
The surviving disruptors include Future Super, Virgin Money, Spaceship, Crescent Wealth and Verve Super.
Homeowners forced to find an extra $1000 each month
The Reserve Bank's 0.25% February rate hike has taken the cash rate to 3.35%, and the big four banks have wasted no time passing the rate rise onto home loan customers.
Graham Cooke, head of consumer research at Finder, says "Australians with the average loan size of around $600,000 will be paying $1,000 more per month compared to what they were paying in April last year.
Rachel Slade, NAB Group Executive for Personal Banking, acknowledges that some Australians will find the latest rate hike "challenging".
"I encourage anyone who is worried about their situation to reach out to their bank," says Slade.
Options that may be available through your lender include reduced payment arrangements, payment breaks or a loan restructure.
New car wait times improve - but drivers still need patience
Times may be tough but that hasn't stopped Australians spending on a new set of wheels.
Figures from the Federal Chamber of Automotive Industries (FCAI) confirm almost 85,000 new cars were delivered in the first month of 2023, the best January result since 2018.
While SUVs dominate drivers' preferences, the Tesla Model 3 is the third highest-selling car so far this year - the first time a pure battery electric model has ranked so highly.
Along with the funds to pay for a car, buyers may need a healthy dose of patience.
The average wait time for new cars has dropped to 137 days, down from a peak of 159 days last August. However, several brands can still face significant delays.
PriceMyCar says Toyota and Isuzu are experiencing wait times in excess of 200 days, with a new Land Rover taking more than a year (376 days) to arrive in Australia.
If you need to get on the road urgently, Mercedes-Benz and Ram have wait times below 20 days.
Shane Warne leads by example
The news this week that cricket legend Shane Warne bequeathed the bulk of his $20-plus million estate to his children is a reminder to all Australians of the need for an up-to-date will.
Best known for his abilities as a spin bowler, Warne is to be admired for having a formal will prepared in late 2021, just three months ahead of his unexpected death at age 52.
It's a change from the legal wrangling left behind by plenty of other celebrities who have died intestate (without a will), leaving family members and circling sharks battling it out in court for a slice of the estate.
Passing away intestate isn't limited to the rich and famous.
Over one in two Australians do not have a will, and that's despite a 33% uptick in people taking out a will during the pandemic.
Do-it-yourself will kits are available for less than $20, but a small error can render the will invalid.
For the cost of a few hundred dollars, state government trustees can draw up a formal will. The NSW Trustee and Guardian for example charges $440 for a basic will. Or talk to your solicitor about preparing a will.
Homeowners still ahead by 28.5%
Falling home values are making headlines, with CoreLogic saying prices have fallen 7.2% nationally over the last 12 months. Sydney has copped the brunt of the downturn with values down by 13.8%.
However, analysis by REA Group shows homeowners who purchased in early 2020, before the start of the pandemic, could be streaks ahead in the capital gains stakes.
REA's latest PropTrack report shows home values nationally are 28.5% higher than in March 2020. This is lapped in regional Tasmania where home values are 51.6% higher compared to pre-pandemic levels.
The gains may start to whittle away. Eleanor Creagh Senior Economist, PropTrack, believes the continued reduction in borrowing capacities as a result of the latest rate hike will weigh on prices.
Get stories like this in our newsletters.