An interest rate pause, but the pain may not be over yet

The prospect of another interest rate hike rests on the outcome of the June quarter inflation figures, research director at property data analysts CoreLogic said.

CoreLogic’s Tim Lawless said while yesterday’s decision by the RBA Board to keep interest rates on hold was welcome news for mortgage holders, it was not an indication that rates had peaked.

“The June quarter inflation outcome, to be released late this month, will be critical in determining whether there are more rate hikes ahead,” he said.

Although most economists expected the RBA Board to increase the cash rate by another 25 basis points yesterday, governor Philip Lowe said the board recognised the need for a pause as the full impact of a four per cent rise in rates since May last year fully played out.

However, another rate rise is clearly still on the table.

“Inflation in Australia has passed its peak and the monthly CPI indicator for May showed a further decline,” Mr Lowe said. “But inflation is still too high and will remain so for some time yet.

“And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment. For these reasons, the Board’s priority is to return inflation to target within a reasonable timeframe.”

Navigating a pathway through managing inflation via additional rate rises without further limiting access to credit will be tricky, Mr Lawless said. At the same time, higher cost of living was having a negative impact on consumer confidence.

“Currently high interest rates and the potential for a hike in August could weigh further on consumer sentiment, which is already around GFC lows,” he said. “Historically consumer sentiment and housing market sales have been closely correlated.

“The combination of high cost of living pressures, negative real income growth and the high cost of debt have made it hard for borrowers to obtain credit approval, especially with lenders less willing to lend on high debt-to-income ratios, high loan-to-income ratios or on smaller deposits.”

He said the current level of interest rates would most likely expose more borrowers to mortgage arrears in the coming months, although it may not be as severe as some predicted.

“To date, the majority of borrowers have kept on track with their mortgage repayments, with APRA data for the March quarter indicating only half a percent of home loan borrows had fallen less than 90 days behind on their mortgage repayments,” Mr Lawless said.

“While the portion of borrowers falling behind on their repayment schedule is likely to rise, Australia’s unemployment rate is forecast to remain below 5 percent, which should help to prevent a material blowout in mortgage arrears.”

Long-term Sydney residents always had handful of not-so-glamourous nicknames for the building on the corner of Cleveland and Baptist Streets straddling Redfern and Surry Hills, but after a modern rebirth that’s all changed.

Once known as “Murder Mall” or “Methadone Mall”, the 1960s-built Surry Hills Shopping Centre was a magnet for colourful characters and questionable behaviour. Today, however, a $500 million facelift of the site — alongside a slow and steady gentrification of the two neighbouring suburbs — the prime corner property has been transformed into a luxury apartment complex Surry Hills Village by developer Toga Group.

The crowning feature of the 122-apartment project is the three-bedroom penthouse, fully completed and just released to market with a $7.5 million price guide.

Measuring 211sqm of internal space, with a 136sqm terrace complete with landscaping, the penthouse is the brand new brainchild of Surry Hills local Adam Haddow, director of architecture at award-winning firm SJB.

Victoria Judge, senior associate and co-interior design lead at SJB says Surry Hills Village sets a new residential benchmark for the southern end of Surry Hills.

“The residential offering is well-appointed, confident, luxe and bohemian. Smart enough to know what makes good living, and cool enough to hold its own amongst design-centric Surry Hills.”

Allan Vidor, managing director of Toga Group, adds that the penthouse is the quintessential jewel in the crown of Surry Hills Village.

“Bringing together a distinct design that draws on the beauty and vibrancy of Sydney; grand spaces and the finest finishes across a significant footprint, located only a stone’s throw away from the exciting cultural hub of Crown St and Surry Hills.”

Created to maximise views of the city skyline and parkland, the top floor apartment has a practical layout including a wide private lobby leading to the main living room, a sleek kitchen featuring Pietra Verde marble and a concealed butler’s pantry Sub-Zero Wolf appliances, full-height Aspen elm joinery panels hiding storage throughout, flamed Saville stone flooring, a powder room, and two car spaces with a personal EV.

All three bedrooms have large wardrobes and ensuites with bathrooms fittings such as freestanding baths, artisan penny tiles, emerald marble surfaces and brushed-nickel accents.

Additional features of the entertainer’s home include leather-bound joinery doors opening to a full wet bar with Sub-Zero wine fridge and Sub-Zero Wolf barbecue.

The Surry Hills Village precinct will open in stages until autumn next year and once complete, Wunderlich Lane will be home to a collection of 25 restaurants and bars plus wellness and boutique retail. The EVE Hotel Sydney will open later in 2024, offering guests an immersive experience in the precinct’s art, culture, and culinary offerings.

The Surry Hills Village penthouse on Baptist is now finished and ready to move into with marketing through Toga Group and inquiries to 1800 554 556.

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A Sydney site with a questionable past is reborn as a luxe residential environment ideal for indulging in dining out