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

By Robyn Willis
Fri, Jan 27, 2023 9:31amGrey Clock 2 min

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. 

 



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The nearly 10,000-square-foot home stands right at the entrance to the Amazon billionaire’s grand, $165 million estate.

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A home that’s right at the entrance to Jeff Bezos’s Beverly HIlls estate, which the billionaire purchased for $165 million in 2020, is now on the market asking $19.8 million.

Shaded by mature olive trees, the three-story modern mansion on Angelo Drive spans nearly 10,000 square feet, and includes five bedrooms, a bar and lounge, a home cinema, a pool with floating benches, and a 15-car garage.

The modern home centers around a striking wood staircase that extends through all three floors, creating an eye-shaped spiral.

Other design choices include a full-height black marble fireplace, herringbone wood flooring, grayscale marble backsplashes in the kitchen and bathroom, banks of floor-to-ceiling windows and a seating area in the middle of the pool.

There is also an outdoor kitchen and eating area poolside, and a living space with sliding doors that open directly onto the pool deck, for indoor/outdoor living.

The home was built in 2021 and designed by Gabbay Architects for the owner, who purchased the underlying property for $4.1 million in 2015, according to property records accessed through PropertyShark.

The seller, who runs a Beverly Hills-based plastic surgery practice, could not immediately be reached for comment.

The Benedict Canyon house came to market Friday with Tomer Fridman of Christie’s International Real Estate. He could not immediately be reached for comment.

The Bezos estate is also known as the Warner Estate, named after its first owner, Hollywood mogul Jack Warner of the Warner Bros.

After Warner, the 9-acre estate was owned by music executive and film producer David Geffen, followed by Bezos. The property includes a palatial Gregorian Revival mansion built in 1939 and designed by architect Florence Yoch to befit the status of one of the most powerful men in Hollywood.

At $19.8 million, the new listing offers quite a deal compared to other properties neighbouring Bezos. In Florida, the owner of a vacant lot next door to the Amazon founder’s estate on Indian Creek Island is asking $150 million for it.

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