RBA Rate Hike Sparks Off-the-Plan Apartment Buyer Uncertainty

The Reserve Bank of Australia (RBA) has increased interest rates to their highest level in 15 years, pushing mortgage repayments higher for hundreds of thousands of borrowers. For off-the-plan apartment buyers, however, the impact is more complex.

While established property buyers feel the immediate effects of higher rates, off-the-plan buyers have a longer timeline to consider. They typically pay a 10% deposit upfront and take out a mortgage for the remaining balance when the apartment settles, which can be two or three years away.

The RBA has warned that rates may not peak yet, leaving off-the-plan buyers wondering what their mortgage rate will be at settlement time. Industry groups are already warning about the impact of weaker confidence and feasibility on the housing pipeline.