The Reserve Bank of New Zealand (RBNZ) has released data on new mortgage commitments, which shows that mortgage demand continues to plummet in response to the RBNZ’s aggressive interest rate hikes. Indeed, according to Westpac, around one quarter of mortgages will come up for re-pricing by the end of this year with a further quarter by mid-2023:This is an ominous sign for New Zealand house prices, which have already plunged by nearly 13% from peak. It is even more worrying for New Zealand’s economy, given the combination of falling wealth (house prices and shares) combined with sharply rising mortgage repayments will slash household consumption – the economy’s biggest driver. Prime Minister Jacinda Ardern must be shaking in her boots given the New Zealand economy faces recession just in time for next year’s national election. The timing couldn’t be worse.

Source: New Zealand Herald October 31, 2022 05:15 UTC