The Reserve Bank of New Zealand (RBNZ) also released its half yearly Financial Stability Report (FSR), which noted that values have to continue falling to return to sustainable levels. It also warned that further sharp price falls “remains plausible”:Our assessment is that New Zealand house prices remain above sustainable levels. A sharp decline from the current price level remains plausible, as the low mortgage rates that drove the recent run-up in prices reverse. Around half of the stock of mortgages on fixed rates is expected to reprice in 2022, increasing serviceability pressure on these borrowers. Note the pink line above showing that average rates on the stock of fixed lending is lagging way behind advertised mortgage rates.

Source: Stuff November 03, 2022 04:00 UTC