‘Nail in the coffin’: Rate rise threatens Aussie home builds

The Reserve Bank’s latest decision to hike the cash rate to a 15-year high of 4.6 per cent has sparked fresh concerns for Australia’s housing supply, as construction costs and borrowing pressures squeeze builders and buyers. Higher interest rates can increase the cost of financing construction projects and weigh on buyer demand, making fewer new builds financially viable and slowing the pipeline of new housing. The warning comes as the construction sector continues to grapple with elevated labour and material costs after one of the biggest increases in building costs on record. According to Equifax Australia’s general manger commercial Brad Walters, even a small increase to construction costs could push households already on a tight budget beyond their financial limits.” “Following Tuesday’s RBA announcement, a 4.6 per cent cash rate has the potential to erode what little financial buffer households have, magnifying the financial impact of construction delays,” he said. The Reserve Bank’s latest decision to hike the cash rate to a 15-year high of 4.6 per cent has sparked fresh concerns for Australia’s housing supply. Picture: NewsWire / Martin Ollman “What this means is that there ...