They're now building the next section, a few blocks away. Many of those houses are approaching completion and are still for sale.
In Europe it's the opposite where almost all mortgages track the 6 month Euribor (or equivalent central bank rate). In my country the maximum fixed term you can get is 5 years, after which it reverts back to variable rate. I'm in the process of buying a house now, and although prices may drop a little and the interest rate may get higher in the short term, in the grand scheme of things that doesn't really affect it much - the monthly payments on a mortgage are still much cheaper than what you would pay to rent.