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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Mirvac’s 45-level Trielle has topped out at Yarra’s Edge, pairing riverfront apartments with wellness facilities, private dining and resident services.
3 min
Mirvac has topped out Trielle at Melbourne’s Yarra’s Edge, with more than 70 per cent of the riverfront development sold and approximately 80 per cent of purchasers intending to make their apartment a home.
The figures, released on September 22, point to an owner-occupier audience for one of the precinct’s final residential towers. Mirvac began developing Yarra’s Edge in 2003, and its latest addition occupies one of the remaining absolute riverfront sites.
Mirvac CEO of Development Stuart Penklis said existing residents were among those moving up within the neighbourhood.
“Many purchasers already have a connection to Yarra’s Edge,” Mr Penklis said, describing buyers whose changing needs were encouraging an upgrade within the precinct.
“As one of the final residential towers within Yarra’s Edge, Trielle represents the culmination of more than two decades of creating one of Melbourne’s most established and sought-after waterfront communities,” Penklis said.
“Positioned on the Collins Street axis with absolute river frontage, Trielle offers residents a rare opportunity to enjoy sweeping views across the Yarra River, Melbourne skyline and Port Phillip Bay, while remaining seamlessly connected to the CBD. With Trielle now more than 70 per cent sold, we’re continuing to see strong demand from buyers seeking quality homes in established locations.”
The developer also flagged a penthouse and sub-penthouse collection with larger layouts, premium finishes and broad outlooks. The planned wellness centrepiece, The Oasis, encompasses a 900-square-metre elevated urban rainforest.
Mirvac General Manager Residential Development Victoria Elysa Anderson said Trielle had resonated strongly with buyers seeking a rare lifestyle offering in Melbourne.
“Opportunities to secure a new luxury residence on a riverfront site of this calibre are incredibly rare, particularly within a community like Yarra’s Edge,” Anderson said.
“What makes Trielle unique is the combination of exceptional views, world-class residential facilities and the lifestyle that already exists around it. Residents are buying into a mature waterfront community with parks, promenades, dining, wellness and strong community connections already in place.”
The 45-level tower brings a substantial new presence to that waterfront. Its residential offering spans one-, two-, three- and four-bedroom apartments, with Signature, Prestige and Sub-Penthouse collections accommodating different household sizes. The north-facing position connects the apartments visually to the river and city beyond.
Seven storeys above the promenade, the planned Oasis combines planting and a running stream with a Scandinavian-inspired wellness club developed with spa specialist Naomi Gregory. Facilities include a 25-metre lap pool, hot magnesium pool, sauna, hydrotherapy, a gym, yoga and Pilates room, and treatment spaces.
The amenity extends beyond exercise. Residents will have access to The Biblioteca library and workspaces, ground-floor work pods, and The Salone piano lounge. A private Chef’s Table dining room offers a setting for larger gatherings, while a cinema, games room and sports lounge broaden the entertaining options. Concierge services and a dog-wash area support everyday routines.
Trielle comprises a collection of one, two, three and four-bedroom residences. Reflecting strong demand from owner occupiers, approximately 80 per cent of purchasers to date intend to live in their homes, highlighting the project’s appeal to those seeking a long-term waterfront lifestyle.
Mirvac has recently delivered The Albertine, a premium apartment development on the edge of Melbourne’s CBD, and is nearing completion of Prince & Parade in Brunswick, further strengthening its portfolio of thoughtfully designed apartment communities in some of Melbourne’s most sought-after urban locations.
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