An interest rate pause, but the pain may not be over yet
Borrowers may need to dig deep before the year is out
2 min
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.”
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Victorian auction buyers will soon receive a piece of information that has traditionally been withheld until bidding reaches it: the vendor’s reserve price. Under new property-sale and underquoting laws, agents must publish the agreed reserve at least seven days before an auction or fixed-date sale. Most changes begin on 1 October 2026 and apply to …
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More than 10,000 homes, an expansive central park and a mix of hospitality, retail and wellness facilities will form Azizi Developments’ first master-planned community in the emirate.
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Sharjah is set to receive one of its largest new residential communities, with Azizi Developments unveiling plans for a US$8.1 billion master-planned precinct containing more than 10,000 homes.
Named Azizi Florence, the freehold development will comprise 1,130 villas, more than 6,000 townhouses and 3,500 apartments. Three-bedroom townhouses will start from US$515,000, with an indicative rate of US$231 per square foot of saleable space.
The project marks the Dubai-based developer’s first move into Sharjah, expanding a portfolio that includes the planned Burj Azizi skyscraper and the Azizi Venice community in Dubai.
A park at the heart of the community
Rather than treating landscaping as an afterthought, Azizi Florence will be organised around a 1.7 million sq ft central park.
The wider precinct is planned as a self-contained neighbourhood combining homes with retail, hospitality, education, leisure and wellness facilities.
Six residential clusters will sit within the development, each with its own park, clubhouse, community centre and landscaped gardens. The approach reflects a broader shift across large Middle Eastern developments, where greenery, recreation and everyday convenience are increasingly central to the residential proposition.
The scale of Azizi Florence suggests it is intended to function as a neighbourhood rather than a collection of housing estates. Its mix of housing types should also give the project broader appeal, accommodating apartment buyers alongside families seeking townhouses or standalone villas.
Azizi expands beyond Dubai
Azizi Developments has delivered more than 45,000 homes to buyers from over 100 countries and says it has approximately 150,000 units under construction.
Much of its growth has been concentrated in Dubai, where its portfolio extends across Palm Jumeirah, Mohammed Bin Rashid City, Dubai South, Sheikh Zayed Road and Downtown Jebel Ali.
Its most prominent current project is Burj Azizi, which is intended to become the world’s second-tallest building. Azizi Florence represents a different type of undertaking: a low-rise, family-oriented community built around public space and daily amenity.
For company founder and chairman Mirwais Azizi, the Sharjah project also carries a personal connection. The emirate was his first home in the UAE more than three decades ago, adding a symbolic dimension to the developer’s expansion.
Sharjah’s residential ambitions grow
Although Dubai and Abu Dhabi have traditionally captured much of the international attention directed at the UAE property market, Sharjah has been steadily broadening its residential offering.
Large freehold communities such as Azizi Florence have the potential to attract both local families and international purchasers looking for comparatively accessible entry points into the Emirates’ property market.
At a starting price of US$515,000, the project’s three-bedroom townhouses will sit well below the cost of equivalent family homes in many of Dubai’s more established luxury communities.
The ultimate appeal, however, will depend on execution. At this scale, the quality of the public realm, connections between residential clusters and delivery of the promised supporting infrastructure will be as important as the homes themselves.
If those elements come together, Azizi Florence could help establish a new benchmark for large-scale residential development in Sharjah—and give buyers another option beyond the UAE’s better-known property markets.
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