At the same time, interest rates have been creeping up alongside the official cash rate, as the Reserve Bank attempts to curb inflation that hit ain July. The central bank is expected to hike the official cash rate further in mid-November, which could see interest rates rise again.
People who bought during that period make up about 40% of the mortgage stock across the country, with 10% of those first home buyers. Roughly half the mortgages on fixed rates are expected to rise before the year ends, which the Bank noted would “increase serviceability pressure” on borrowers. House prices across the globe skyrocketed during the pandemic, with money flooding the market because investing in property was thought to be “as safe as houses”, he said. Now with inflation, restrictions on lending and rising rates, that money has reduced to a trickle, Rehm said, adding that New Zealand’s market is an extreme example.