Independent economist Cameron Bagrie says the decline in mortgage commitments was inevitable after the insane boom that took place in 2021. There are loan-to-value ratios, banks tightening up on risk capacity, some banks imposing debt-to-income ratios, tighter servicing criteria, and also rising mortgage rates”, Bagrie said. Meanwhile, New Zealand economists are warning that rising mortgage rates will further dampen mortgage demand and house prices. A Bloomberg survey of economists are tipping that the interest rate on a two-year fixed mortgage will rise to 5.5% by the end of 2022, with one-year fixed rate mortgages climbing above 5%. The prospect of sharply rising mortgage rates leaves New Zealand households and the economy exposed.

Source: Stuff March 28, 2022 15:56 UTC