Inflation set to level out in 2023 - but more interest rate pain likely

Australian mortgage holders should prepare themselves for more pain this year, with experts predicting another interest rate rise when the RBA meets next month.

The Big Four banks expect the RBA to raise the cash rate by at least another 25 basis points, which would mark the ninth consecutive rise since May last year, and the highest peak since 1990 at 3.35 percent.

The Reserve Bank has been raising the cash rate in a bid to combat rising inflation, which currently sits at 7.8 percent, the highest level since 1990. The Australian Bureau of Statistics points to more expensive domestic holidays, international travel and higher energy prices as some of the key drivers.

While some have expressed concern that further interest rate rises could be enough to push Australia into a recession, head of research at CoreLogic, Eliza Owen, says there’s not too much cause for alarm just yet.

In the CoreLogic Property Pulse Report released this week, she points out that the RBA predicted inflation would peak at 8 percent this year and that the signs of a coming decline in the rate of inflation are already there.

“Underlying core inflation (the RBA’s preferred reading on inflation), which is measured by trimming excessively volatile components of CPI, actually fell in the quarter, from 1.9 percent in September to 1.7 percent,” she said in the report.

“Annual core inflation is still a long way from the 2 to 3 percent target range set by the RBA, at 6.9%. However, December marked the first fall in quarterly core inflation since March 2021, following eight consecutive interest rate rises from May 2022.”

The result, she said, is that inflation may have already peaked.

“Inflation across the combined OECD slowed to 1.8 percent in the September 2022 quarter, after peaking at 2.1 percent through June,” she said. “Forecasts from the OECD also suggest a fall in inflation through 2023 across most major economies, as global economic demand starts to slow.”

This includes Australia’s major trading partners such as China, Germany, Japan and the US.

In better news for those looking to renovate or build this year, the report also says that housing metrics indicate the rate of growth in new build costs is slowing.

“December CPI figures showed housing costs were still up a substantial 1.9% in the quarter, but this was down from a 3.2% lift in the three months to September,” Ms Owen said.

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.

Inflation set to level out in 2023 – but more interest rate pain likely

Mortgage holders should brace themselves for another hip pocket hit when the RBA meets next month

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