The Reserve Bank of Australia has increased the cash rate by another 0.25%, taking it to 4.60%.
For buyers who are currently looking at property, the immediate question is understandable:
Should I keep looking, or should I wait?
There isn't a one-size-fits-all answer.
But I don't think a rate increase, by itself, means buyers should automatically put their property plans on hold.
Start with your own numbers
The first thing I would recommend is going back to your broker and reassessing your borrowing capacity.
A change in interest rates can affect both your borrowing capacity and your projected repayments. So before continuing your search, make sure you understand what the new numbers look like for you.
But there is another number that is just as important:
What are you actually comfortable spending?
There can be a significant difference between what a lender is prepared to lend you and what you feel comfortable committing to each month.
I never want a buyer to stretch themselves to their absolute borrowing limit simply because the bank says they can.
Higher rates can also change the buyer landscape
One thing that can be overlooked when rates rise is the potential impact on buyer behaviour.
Some buyers may reduce their budgets.
Some may decide to pause their search.
Others may leave the market altogether.
That can change the level of competition for properties, particularly in situations where buyers are financially prepared and have a clear understanding of what they are looking for.