Buy a Sydney new-build flat at 7.96%, or wait for lower rates?

L

loft.balanced

First-time buyer
Established
I’m considering a Sydney new-build flat at A$2,029,000. I can afford the purchase at 7.96%, but I’m torn between proceeding now and waiting for cheaper finance. If rates fall before local inventory improves, competition may simply lift prices.

Rather than trying to predict both variables, what stress tests would you use? I’m particularly concerned about monthly affordability, rate resets, refinancing and resale risk. Disagreement is welcome, provided the assumptions reflect a new-build flat rather than housing generally.
 
I’d compare three scenarios over the same holding period: buy now with no rate improvement, buy now and refinance later, or wait and pay a higher purchase price at a lower rate. Include arrangement fees and any refinancing costs rather than comparing headline rates alone.

The key test is whether you remain comfortable if 7.96% persists longer than expected. A future refinance should be an upside case, not what makes today’s purchase affordable.
 
Also stress the property value downward before assuming refinancing is available. If the loan-to-value ratio worsens because the flat is valued below the contract price, the attractive future loan you are counting on may not be offered on the terms you expect. What deposit are you using, and how long do you expect to keep the flat?
 
I’d push back on the idea that lower rates must raise this flat’s price enough to punish waiting. More buyers may return, but new-build flats have their own supply and resale dynamics. The relevant competition is for comparable flats in that part of Sydney, not the whole market.

Waiting has value if it gives you a better view of completed quality, nearby inventory or valuations. The cost is that rates and prices may move against you while you wait.
 
The intended holding period changes the answer. If resale within a few years is plausible, test selling without any price growth and after transaction and loan-exit costs. If this is a long-term home, monthly resilience matters more than guessing the next market move.

I’d also ask the lender whether the loan has early-repayment restrictions, what portability actually covers, and when the rate can reset. Those details could matter more than a modest future rate reduction.
 
A practical next step is to set two firm limits before deciding: the highest monthly payment you would tolerate after a rate reset, and the lowest resale valuation that would still leave you able to move or refinance. Then obtain loan illustrations using identical comparison periods, including arrangement fees.

If the purchase only works with lower rates, rising prices and an easy refinance, it is too dependent on favourable assumptions. If it works without all three, buying now becomes much easier to defend.
 
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